Only a portion of the settlement will come from Mohawk, which admitted no wrongdoing. Zurich American Insurance Co., Mohawk's insurer, will pick up the majority of the tab.
Mohawk also will implement training procedures and best practices for verifying employment eligibility.
"Mohawk is pleased to have reached a settlement that allows the company to put behind it the expense and distraction associated with this case," Mohawk attorney Juan P. Morillo said in a statement. "Mohawk has always trained its employees to comply with the immigration and workplace laws, and this settlement affirms the company's commitment to a continued culture of compliance."
The case has been widely followed as the workers' attorneys sued Mohawk by employing a law largely used by the federal government to go after organized criminal activity. The government has used Racketeer Influenced and Corrupt Organizations -- or RICO - to help put New York mob boss John Gotti behind bars and to tangle with Big Tobacco.
The case was filed against a backdrop of increased public debate over illegal immigrants and stepped-up enforcement by Immigration and Customs Enforcement officials in their audits of employers to see whether they were hiring undocumented workers.