Labor Dept. says Wal-Mart must pay $5M in back wages

By Michael P. Tremoglie | May 3, 2012

WASHINGTON (Legal Newsline) -- Wal-Mart will pay nearly $5 million in back wages and damages to more than 4,500 employees across the country the Department of Labor (DOL) has announced.

In addition to the $4,828,442, Wal-Mart also will pay $463,815 in civil money penalties.

This action followed an investigation by the Wage and Hour Division that found violations of the federal Fair Labor Standards Act's overtime provisions. The violations affected current and former vision center managers and asset protection coordinators at Wal-Mart Discount Stores, Wal-Mart Supercenters, Neighborhood Markets and Sam's Club warehouses, according to the Labor Department.

Wal-Mart failed to compensate these employees with overtime pay, considering them to be exempt from the FLSA's overtime requirements. The Labor Department determined they are nonexempt and due overtime pay for working more than 40 hours in a week.

"Misclassification of employees as exempt from FLSA coverage is a costly problem with adverse consequences for employees and corporations," Secretary of Labor Hilda L. Solis said. "Let this be a signal to other companies that when violations are found, the Labor Department will take appropriate action to ensure that workers receive the wages they have earned."

The FLSA provides an exemption from minimum wage and overtime pay requirements for executive, administrative, professional and outside sales personnel as well as certain computer employees. Employees generally must meet certain requirements regarding their job duties. Job titles do not determine exempt status.

"Our department has been working with Wal-Mart for a long time to reach this agreement," said Nancy J. Leppink, deputy administrator of the Wage and Hour Division. "I am very pleased that staff in our Southwest region persevered, ensured these employees will be paid the back wages they are owed and brought this case to conclusion. Thanks to this resolution, thousands of employees will see money put back into their pockets that should have been there all along.

"The damages and penalties assessed in this case should put other employers on notice that they cannot avoid their obligations to their employees by inappropriately classifying their workers as exempt."

"Walmart has had wage-and-hour issues for perpetuity," said John Raudabaugh, professor of labor law at Ave Maria School of Law and a former NLRB member. "I do not think it is deliberate. It probably has more to do with less than perfectly written federal regulations."

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