Wal-Mart to Pay $4.8 Million in Unpaid Overtime Wages

(May 8, 2012) – The Department of Labor announced Tuesday that Wal-Mart had agreed to pay $4.83 million in back wages and damages to employees it had allegedly denied overtime, following an agency investigation. More than 4,000 workers, all vision center managers or asset protection coordinators, will receive money from the settlement.

 

Wal-Mart is also being investigated by the Department of Justice and the U.S. Congress over allegations that it systematically bribed Mexican officials in order to obtain permits for new stores.

 

All U.S. workers are legally entitled to overtime when they work more than 40 hours a week, however certain salaried managerial employees in “executive, administrative or professional” roles are exempt from this provision under the Fair Labor Standards Act.  Prior to 2007, Wal-Mart considered its vision center managers and asset protection coordinators exempt, a policy the Department of Labor now calls a “misclassification.”

 

The violations cover current and former managers at Wal-Mart Vision Centers and certain security personnel at Wal-Mart Discount Stores, Wal-Mart Supercenters, Neighborhood Markets and Sam’s Club warehouses.

 

Wal-Mart spokesman, Greg Rossiter, said the company took the allegations seriously when they were first raised in 2007, and immediately corrected the way it classified the employees.

 

“We adjusted our pay practices at that time and determined that back wages should be paid for the associates involved,” Rossiter said.

 

Nancy J. Leppink, head of the Labor Department’s Wage and Hour Division, said she hoped the case would put other employers on notice that they can’t avoid paying overtime by improperly classifying their workers as exempt.

 

The asset protection coordinators will receive an average of $290 a person, while the vision center managers will receive an average of $2,300 each, according to Rossiter.

 

This is not the first time Wal-Mart has faced a lawsuit over its overtime policies. In 2008, the company agreed to pay as much as $640 million to settle 63 federal and state class actions that charged the company with refusing to pay overtime, as well as other types of wage issues.

 

In another case in Massachusetts in 2009, the company paid $40 million, the largest wage and hour class action settlement in the state’s history, to settle a suit accusing Wal-Mart of refusing to pay overtime, denying employees their rest breaks and tampering with time sheets.

 

In 2007, another Department of Labor settlement, Wal-Mart paid $33.5 million in back wages to 86,680 workers, many of them managers who were denied overtime.

 

Some employees at Wal-Mart warehouses have also filed lawsuits, claiming that their “wages were stolen.”  In California and Illinois, workers allege that Wal-Mart’s warehouse operators, who have exclusive contracts with the retailer, paid them for fewer hours than they actually worked.

 

The most recent Department of Labor settlement also included a civil penalty of $463,815 that “stems from the repeat nature of the violations,” according to an agency news release.

 

How many more lawsuits will it take before Wal-Mart stops cheating its employees?  Wal-Mart is such a successful company, why do they feel the need to steal from the their own employees? Is this justice?

 

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