The lawsuit was brought by former employee Jasmin Gerlach on behalf of herself and others who had worked as business systems consultants at Fargo Wells.
She claimed that the bank was unfairly demanding that employees work unpaid overtime by classing them as exempt form Californian employment laws which demand payment for employees working extra hours.
Wells Fargo agreed to pay the settlement in order to avoid a long and drawn out legal case, although the bank did not admit any wrong-doing.
The money paid is set to be divided among the employees depending on how long they had worked for the company, an official statement said.
The settlement was given preliminary approval by a US district court on Monday.