Hanwha Philadelphia Shipyard (formerly Philadelphia Shipyard) has agreed to pay $900,000 (approximately RMB 6.157 million) in settlement to resolve a class action lawsuit involving unpaid wages.

The lawsuit, filed by approximately 752 employees, covers the period from June 27, 2022, to December 11, 2025. The central dispute centers on whether employees' “commuting walking time” within the shipyard premises should be counted as paid working hours.

Due to the shipyard's vast scale, workers must walk considerable distances to reach dry docks after clocking in each day and return to the exit on foot after work. The plaintiffs claim this walking time remains unpaid, resulting in weekly actual working hours exceeding 40 hours without overtime compensation—allegedly violating the Pennsylvania Minimum Wage Act (PMWA).

Under the settlement agreement, 33% of the $900,000 settlement fund (approximately $297,000) will cover plaintiffs' attorneys' fees and litigation costs. The remaining approximately $603,000 constitutes net compensation, distributed proportionally based on each employee's actual number of overtime weeks worked, without requiring separate claims. The lead plaintiff will additionally receive $10,000 in compensation.

The shipyard emphasized in its statement: “This settlement is solely a decision to avoid the risks, delays, and costs of ongoing litigation and does not constitute an admission of any legal liability or wrongdoing.”

If the court approves the preliminary and final settlement, the case will be conclusively dismissed with res judicata effect, barring plaintiffs from filing subsequent lawsuits on the same grounds.

Hanwha Philadelphia Shipyard also stated: The shipyard has fully paid all employees their due ‘accrued time’ compensation... To avoid potential future expenses, inconvenience, and disruption to current business operations, it was decided to resolve this litigation through settlement."

Notably, this marks the first large-scale labor class action lawsuit faced by a South Korean shipbuilder since entering the U.S. market. As South Korean shipbuilders increase investments in the U.S., similar labor compliance risks may become more apparent.