labor lawAdivision of labor law center

A settlement was recently announced between Wal-Mart and the US Department of Labor to address federal and Louisiana minimum wage law violations. This agreement will pay $33 million to almost 87,000 employees. These employees are located in Louisiana and across the nation.

This settlement addresses the main issue of how salaried interns, trainees, managers, and programmer trainees were paid by Wal-Mart. Although these employees were salaried, federal law states that they still may be entitled to overtime payments. According to the US Department of Labor, Wal-Mart employees who had to work long hours but were paid little money were actually “non-exempt salaried.” What this means is that these employees, although salaried, were still entitled to overtime compensation.

Federal and Louisiana minimum wage laws specify that not all employees who are salaried are exempt from overtime compensation. New guidelines established within the last few years specify that if an employee is paid less than $455 each week, they should be paid overtime if they work in excess of 40 hour a week. Salaried managers who earn more than this may still be entitled to overtime.  

This settlement concerned manager trainees. Many of these employees had little say in decision making but still had to work long hours. These employees were paid less than $23,600 a year, so they still were eligible for overtime.

Wal-Mart has encountered problems with their payroll system before. Private litigation isn’t impacted by this agreement, since it only addresses those violations that were outlined in the judgment.

Other companies have tried not paying overtime before. Over 20 years ago, Howard Johnson’s tried a similar approach, but was unsuccessful. In a similar situation to Wal-Mart’s, Howard Johnson’s employed “assistant managers.” These employees worked in the company’s restaurants, sometimes putting in more than 80 hours a week without much pay. Like Wal-Mart, Howard Johnson’s was found guilty.

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