Wal-Mart to Pay $4.8M in Back Wages for Fair Labor Standards Act Violations

Wal-Mart Stores Inc. has agreed to pay more than $4.8 million in back wages and damages to more than 4,500 employees nationwide after an investigation by the U.S. Department of Labor’s wage and hour division that found violations of the Fair Labor Standards Act’s overtime provisions, the agency said.

The Bentonville, Arkansas-based retailer also will pay an additional $463,815 in civil penalties, the agency said May 1.

The Labor Department said under terms of the settlement, Wal-Mart has agreed to pay all back wages the department determined are owed for violations in addition to paying liquidated damages to the employees and a penalty to the department.

It said the civil money penalties assessed stem from the violations’ repeat nature. The agency said Wal-Mart corrected its classification practices in 2007, and negotiations over the back pay issue have been ongoing since that time. A third-party administrator will disburse the payments to the affected employees, the DOL said.

Nancy J. Leppink, the wage and hour division’s deputy administrator, said in a statement: “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.”

Wal-Mart said in a statement, “When the issues resolved on May 1 were initially raised, we took them seriously and fully cooperated with the Department of Labor to make sure they were corrected in 2007. We adjusted our pay practices at the time and determined that back wages should be paid for the associates involved.”

Judy Greenwald writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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