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Wal-Mart to Pay $4.8 Million in Back Wages, Damages

Source: WSJ

Posted on 02 May 2012

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Wal-Mart Stores Inc. agreed to pay employees $4.8 million in back wages and damages, as well as $464,000 in civil penalties, on Tuesday after the U.S. Department of Labor found the company failed to pay overtime to more than 4,500 workers.

While the fine pales in comparison to the $352 million the Bentonville, Ark.-company paid in 2008 to settle 63 suits across the country over allegations it didn't provide workers with proper rest and meal breaks, the settlement highlights the lingering complaints Wal-Mart faces over how it treats its workers.

In this settlement, the Labor Department found that workers employed as Wal-Mart or Sam's Club security guards or as managers in the stores' vision departments between 2004 and 2007 were denied overtime pay when they were incorrectly classified as exempt from the federal Fair Labor Standards Act's overtime laws.

The act mandates employees be paid at least a $7.25 minimum wage, plus time-and-one-half their regular rates for hours worked beyond 40 per week. Some employees, such as executives and administrative workers who are paid a salary of more than $455 a week, are exempt from overtime rules.

Although the suit was resolved only recently, Wal-Mart said it had adjusted its pay practices and reclassified its employees in 2007 when the Labor Department alerted the company to the problem. It has also employed electronic systems to document compliance with state and federal labor laws.

The settlement will award workers payments ranging from $30 to $10,800.

"When the issues resolved today were initially raised in 2007, we took them seriously and fully cooperated with the Department of Labor to make sure they were corrected," said Wal-Mart spokesman Greg Rossiter.

Wal-Mart is one of many large retailers that have been accused of committing wage and hour violations, often paying out millions of dollars to settle class-action lawsuits. Cases range from failing to pay minimum wage and off-the-clock work to unpaid overtime and misclassification of workers. In 2010, Staples Inc., the office-supply company, paid $42 million to settle with 5,000 managers over unpaid overtime.

Corrections & Amplifications ?Wal-Mart paid a $352 million fine in 2008 to settle 63 suits across the country over allegations it didn't provide workers with proper rest and meal breaks. A previous version of this article incorrectly said it paid more than $600 million.