labor lawAdivision of labor law center

A recent settlement reached between Wal-Mart and the US Department of Labor addresses the retail giant’s violations of federal and Georgia minimum wage laws.

What are the terms of this settlement?

Wal-Mart has agreed to pay almost 87,000 employees in Georgia and around the nation $33 million in back pay and interest.

Why are these employees receiving this money?

Certain salaried employees, such as programmer trainees, interns, and manager trainees received low wages and worked long hours. Federal law stipulates that even though employees are salaried, they still may qualify for overtime. According to the US Department of Labor, these Wal-Mart employees were actually “non-exempt salaried” and therefore qualified for overtime. In this case, manager trainees worked long hours for low pay even though they had no authority to make decisions nor did they oversee any employees.

What determines if a salaried employee qualifies for overtime? 

New guidelines require that overtime be paid to employees who earn less than $23,660 a year ($455 a week). Some of the Wal-Mart employees earned much less than this. Moreover, employees can earn more than $23,660 per year and still qualify for overtime pay if they do not have the authority to make decisions that impact a store, division, or department. In most cases, this decision-making power includes the authority to hire and fire in excess of 3 employees.

Does this agreement impact other litigation against Wal-Mart?

No. Only those specific violations outlined in the judgment are resolved by this agreement. Other litigation is not impacted. In addition, workers can still file complaints with the US Labor Department. 

Have other companies tried to avoid paying overtime wages?

Yes. Howard Johnson’s, a giant in the hospitality industry, used a similar tactic in the early 1980s. Employees in the restaurants were hired as “assistant managers” and then would bus tables, wait on customers, and wash dishes for 80 or even more hours each week. Howard Johnson’s was found guilty.

 

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