The U.S. Department of Labor has ordered retail giant Wal-Mart to pay $4.8 million in back wages to thousands of employees who were wrongly withheld overtime compensation. According to the Chicago Tribune, Wal-Mart will also pay $463,815 in civil fines for the labor violations. The back wages will be paid to approximately 4,500 employees that were either managers at Wal-Mart vision centers or security personnel at some Walmart Discount Stores, Walmart Supercenters, Neighborhood Markets and Sam’s Clubs between 2004 and 2007.
Wal-Mart allegedly did not compensate these employees for overtime because they were considered “exempt.” The Fair Labor Standards Act (FLSA) sets federal labor guidelines, including that employees must be paid overtime pay of one-and-one-half times the regular rate of pay for every hour worked over 40 in a single workweek. Under the FLSA, some employees can be labeled as “exempt” from overtime and other benefits. This means that if an employee fulfills certain criteria (usually management, but can also include home care workers, babysitters, outside sales, etc.), he or she may be ineligible for overtime pay and other benefits. Wal-Mart reportedly fixed this error in calculating exemptions in 2007.
Wal-Mart has recently been embroiled in a bevy of scandals that have rocked the retail behemoth. Just last month, it was alleged that executives covered up findings that Wal-Mart de Mexico paid off Mexican government officials in order to speed up construction of stores in the country. Last year, Wal-Mart was brought to the U.S. Supreme Court in a case that involved over 1 million female employees claiming that the company practiced sexual discrimination. In March, one of Wal-Mart’s subcontractor warehousing companies had a second lawsuit leveled against it for allegedly failing to pay employees for working overtime.
Even with the scrutiny that large companies are put under, many still manage to withhold proper compensation from employees. Often times, employees do not know the details of sometimes-intricate labor laws, and thus do not even realize that they are not being fairly compensated. If you believe that you might not be receiving the wages you have rightly earned, fill out the no-obligation form for a free consultation from a seasoned FLSA attorney. You may be eligible to enter a wage lawsuit to recover back pay for unpaid overtime and/or underpayment.