labor lawAdivision of labor law center

A new settlement between Wal-Mart and the U.S. Labor Department is costing the retailer $33 million in back pay and interest.

The settlement involves a violation of U.S. and Florida minimum wage laws. Salaried interns, manager trainees and programmer trainees were improperly paid, working long hours without overtime. Even many salaried employees, contrary to popular assumption, are entitled to overtime pay, provided they fall under certain guidelines regarding their duty and their pay level.

In the Wal-Mart case, almost 87,000 employees will receive the back pay. Wal-Mart is still vulnerable to litigation and workers may still make official complaints against the retailer with the U.S. Department of Labor.

The Labor Department has strict guidelines about who is exempt from protection of the overtime pay regulations. Most workers think that if they’re salaried they are not covered. But that is not the case. In fact, federal and Florida minimum wage laws include guidelines that say anyone making less than $23,600 a year (or $455 a week) is still covered by the law, even if they are salaried. Even if they fall below that level, they may be covered. That is because the law also requires that to be exempted from the overtime law, a salaried manager must meet certain criteria. He or she must have major decision-making authority in a store, division or department, and have the capacity to hire and fire more than three employees.

In the Wal-Mart case, manager trainees had little power to make decisions and were not supervisors. Wal-Mart required them to work long hours, and some were even paid considerably below the $23,600 cutoff point.

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