On March 27, 2026, a federal court certified both a class action and a collective action against the Salvation Army in connection with wage violations involving thousands of workers in Adult Rehabilitation Centers (ARCs). The certification means that workers from multiple states who participated in the Salvation Army’s ARC program—and were paid as little as $7 per week for mandatory labor—can now proceed with claims for unpaid wages under federal minimum wage laws and state wage statutes. This marks a significant moment in an ongoing legal battle that began in March 2022, when workers across the country first filed suit against the organization. The case hinges on whether Salvation Army ARC participants should have been treated as employees entitled to minimum wage protections.
These individuals worked mandatory hours—typically 40 or more per week—in Salvation Army thrift and retail stores as part of a program described by the organization as rehabilitation and job training. Instead, they received a wage progression starting at just $7 per week and increasing by $1 each week, capping out at $25 per week. Federal law requires employers to pay at least the federal minimum wage of $7.25 per hour, which would translate to significantly higher compensation for full-time work. This article explains what the class action certification means for affected workers, how the wage structure allegedly violates labor law, who can participate in the lawsuit, and what happens next in the litigation.
Table of Contents
- What Does the Court Certification Mean for the Salvation Army Lawsuit?
- How Much Were ARC Workers Actually Paid?
- What Is the Salvation Army ARC Program?
- Which States Are Included and Who Can Participate?
- What Are the Specific Legal Claims Against the Salvation Army?
- What Happens Next in the Litigation?
- What Do This Case and Others Like It Reveal About Worker Protections?
- Frequently Asked Questions
What Does the Court Certification Mean for the Salvation Army Lawsuit?
court certification of a class action and collective action is a procedural milestone that allows individual workers to pursue claims collectively rather than in isolation. When a court certifies a class action, it determines that the case meets specific legal requirements: the group of affected individuals is large enough, the claims share common legal or factual questions, the lead plaintiffs’ claims are typical of the broader group, and the attorneys will fairly represent everyone involved. By certifying both a class action and a collective action under the Fair Labor Standards Act (FLSA), the court acknowledged that Salvation Army’s alleged wage practices harmed thousands of workers across multiple states. The certification means workers no longer face the burden of proving their individual cases separately. Instead, the litigation will proceed with the lead plaintiffs’ claims serving as a test case for the broader group.
Workers who believe they worked in a Salvation Army ARC and were underpaid can potentially join the class without filing their own lawsuits. The court’s decision also strengthens the legal position of the plaintiffs’ attorneys—firms including Cohen Milstein and RBGG—by confirming that the case has merit and scope large enough to warrant class treatment. However, certification does not guarantee that plaintiffs will win the case. It simply means the lawsuit can move forward on behalf of thousands of workers. The Salvation Army still has the opportunity to defend against the claims in subsequent litigation phases, potentially including settlement negotiations or trial.
How Much Were ARC Workers Actually Paid?
The Salvation Army’s Adult Rehabilitation Center program compensated workers using a weekly wage structure that fell dramatically short of federal minimum wage requirements. Workers who first enrolled in the ARC program earned $7 per week. As they continued in the program, their weekly pay increased by $1 for each additional week of work, meaning a worker in their second week earned $8, their third week earned $9, and so on. The maximum weekly wage was $25 per week, which workers could reach and maintain indefinitely if they remained enrolled in the program. To illustrate the scale of underpayment: a worker performing 40 hours of mandatory labor per week at the program’s starting rate of $7 per week would earn less than $0.18 per hour.
Even at the maximum of $25 per week for 40 hours of work, a participant would earn only about $0.63 per hour—a fraction of the $7.25 per hour federal minimum wage. For context, the federal minimum wage for 40 hours of work per week totals approximately $290 per week. The wage structure allegations form the core of the plaintiffs’ argument that Salvation Army violated both federal wage and hour law and various state wage statutes. Salvation Army has historically defended the ARC program as a rehabilitation and job training initiative rather than traditional employment. However, the court’s certification of the lawsuit suggests that federal and state judges found the plaintiffs’ argument—that mandatory work for compensation constitutes employment subject to wage laws—sufficiently plausible to allow the case to proceed on behalf of a class.
What Is the Salvation Army ARC Program?
The Salvation Army’s Adult Rehabilitation Center program operates in multiple states, offering what the organization describes as a comprehensive residential rehabilitation experience for individuals struggling with substance abuse and other challenges. Participants in the ARC program are required to work a minimum of 40 hours per week in Salvation Army thrift and retail stores as part of the program’s curriculum. These work assignments are presented as a therapeutic and educational component of rehabilitation, not as employment in the traditional sense. Participants performed various tasks in Salvation Army retail locations, including sorting donated goods, stocking shelves, operating registers, and managing inventory.
The work is identical to what paid employees perform in these stores, yet ARC participants were classified differently and compensated at rates far below minimum wage. The program operates across a broad geographic footprint, which is why the litigation encompasses workers from multiple states and regions. The classification of ARC participants as something other than employees—such as trainees or residents of a rehabilitation program—is central to Salvation Army’s defense. However, the plaintiffs’ argument, which the court found sufficiently credible to certify, is that this classification is a mischaracterization designed to avoid wage and hour law obligations. When someone works mandatory hours for an organization that benefits from their labor and receives compensation in return, wage law advocates argue, they should be treated as employees regardless of the program’s stated purpose.
Which States Are Included and Who Can Participate?
The court certified two distinct but overlapping legal claims: a class action and a collective action under the Fair Labor Standards Act. The class action covers workers from three states specifically: Illinois, Michigan, and Wisconsin. The broader FLSA collective action encompasses a significantly larger geographic area, including Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin. The litigation collectively describes potential claims affecting thousands of ARC workers across 38 states, indicating that Salvation Army ARCs operated or continue to operate in locations well beyond the certified litigation zones.
Individuals who participated in a Salvation Army Adult Rehabilitation Center program and worked the required hours without receiving minimum wage compensation may be eligible to participate in the lawsuit. This generally includes anyone who worked in an ARC during the period covered by the litigation (with the statute of limitations and other legal timelines applying). Workers who received the progressive weekly wage payments—starting at $7 and increasing by $1 weekly up to $25—are the primary targets of the litigation. workers in states not specifically mentioned in the class certification may still have claims under state-specific wage laws or may potentially be included in future litigation phases. The certified class and collective action represent the court’s determination that these particular groups of workers have standing to pursue claims together, but the underlying legal violations Salvation Army is accused of—underpaying workers for mandatory labor—potentially affect individuals far more broadly.
What Are the Specific Legal Claims Against the Salvation Army?
The plaintiffs’ core allegation is that Salvation Army violated federal minimum wage requirements under the Fair Labor Standards Act by compensating workers below the federal minimum of $7.25 per hour. The FLSA is the primary federal law governing minimum wage, overtime, and other wage protections. A violation occurs when an employer pays covered employees less than the minimum wage for all hours worked, regardless of the employee’s job classification or the reason the employer provides for that compensation structure. Beyond federal law, the plaintiffs also allege violations of various state wage and hour statutes. Different states have their own minimum wage laws and wage payment requirements, some of which are stricter than federal standards.
For example, some states require minimum wages higher than the federal floor, others mandate more frequent wage payments, and many have specific rules about how and when workers must be paid. By including state law claims, the litigation accounts for the fact that ARC workers in different states may have additional protections beyond the federal minimum. A critical question in the case is whether ARC participants should be classified as employees under wage law. If Salvation Army can successfully argue that ARC participants are residents of a rehabilitation program rather than employees, the organization might claim that wage laws don’t apply. However, the court’s decision to certify the class action suggests that judges found the plaintiffs’ position—that mandatory work for compensation equals employment—legally credible. The litigation will likely involve extensive discovery and argument about the nature of the relationship between Salvation Army and ARC participants.
What Happens Next in the Litigation?
Following class certification, the case enters the next phase of litigation, which typically involves discovery—the process by which both sides exchange documents, testimony, and other evidence. The plaintiffs’ attorneys will likely seek information about how many workers participated in the ARC program, how they were compensated, which stores they worked in, and internal Salvation Army communications about the program’s structure and wage decisions. Salvation Army will defend against these claims and provide its own evidence.
Settlement discussions often occur during this phase. Given the size of the certified class and the complexity of determining individual damages, the parties may pursue a settlement agreement that establishes the total amount of money Salvation Army will pay and the mechanism for distributing it among eligible workers. Alternatively, the case could proceed to trial, where a judge or jury would decide whether Salvation Army violated wage laws and, if so, how much compensation workers are owed. The lead counsel firms—Cohen Milstein, RBGG, and co-counsel—will guide the litigation process and represent the interests of the broader class.
What Do This Case and Others Like It Reveal About Worker Protections?
The Salvation Army litigation is one of several high-profile cases in recent years examining whether nonprofit organizations and other entities are properly classifying workers and providing required wage protections. Courts and regulators have increasingly scrutinized business models where work is performed under different classifications—interns, trainees, volunteers, program participants—that might avoid minimum wage obligations. The Salvation Army case specifically raises questions about whether rehabilitation programs can legally require mandatory work without providing employee-level compensation.
This case also reflects a broader trend in worker advocacy and litigation around the definition of employment itself. As business models become more complex and creative, disputes over who qualifies for wage protections are likely to continue. The court’s decision to certify the class action suggests that this particular theory of Salvation Army’s liability—that mandatory work for compensation constitutes employment—has legal merit. If plaintiffs prevail, it could have implications for how other organizations structure rehabilitation, training, and work-based programs.
Frequently Asked Questions
How do I know if I’m eligible to participate in this class action?
You may be eligible if you worked in a Salvation Army Adult Rehabilitation Center program and were compensated using the progressive weekly wage system (starting at $7 and increasing by $1 per week). The certified class specifically includes workers from Illinois, Michigan, and Wisconsin, though the broader FLSA collective action covers additional states. You should watch for official class notices or contact the lead counsel firms—Cohen Milstein or RBGG—for specific eligibility information.
What compensation might I receive if the plaintiffs win?
The amount depends on how many hours you worked, the dates of your work, your applicable state’s wage laws, and the outcome of the litigation. If Salvation Army is found to have violated wage laws, damages are typically calculated by determining what you should have been paid under minimum wage law and subtracting what you actually received. Additional penalties and interest may also apply.
Can I participate in this lawsuit even if I’m in a state not mentioned in the certification?
The certified class action covers Illinois, Michigan, and Wisconsin specifically, while the collective action covers a broader region. However, workers in other states may have separate claims under their own state wage laws, and there may be opportunities to join expanded litigation if the case proceeds further. Contact the law firms for guidance on your specific situation.
Is the Salvation Army guaranteed to lose this case?
No. Certification means the case can proceed on behalf of a class, but it does not determine the outcome. Salvation Army has the opportunity to defend against the allegations through settlement negotiations or trial. However, the court’s decision to certify suggests that the plaintiffs’ legal theory is sufficiently credible to warrant proceeding as a class action.
When will I know the outcome or receive compensation?
Class action litigation typically takes months to years depending on complexity, discovery disputes, and whether the case settles or goes to trial. Once the litigation concludes, there is usually a claims process where eligible participants must submit documentation to receive their portion of any settlement or judgment. Official notices will provide details on how and when to file claims.
What should I do if I think I’m affected by this case?
Document your work history with the Salvation Army ARC program, including dates worked, hours per week, and your location. Keep records of any wage statements or payment information you received. Monitor for official class action notices, or reach out to Cohen Milstein or RBGG directly for guidance on participating in the lawsuit.
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