labor lawAdivision of labor law center

More than 86,000 Wal-Mart employees have the US Department of Labor (DOL) to thank for payments they will soon receive from the retail giant.  These employees will finally receive monies earned when they worked overtime but were not paid according to state and federal labor laws.

A recent court ruling has deemed Wal-Mart Stores, Inc. (Wal-Mart) in violation of federal minimum wage laws.  Wal-Mart is also cited for violating similar laws governed by DOL’s Fair Labor Standards Act (FLSA), which also addresses minimum wage and overtime laws on a nationwide basis.

Coming as a result of a complaint filed in US District Court by the DOL on behalf of the Wal-Mart employees, unpaid overtime earnings, plus interest, must be paid to employees working overtime for the nation’s largest retailer from February 1, 2002, until January 19, 2007.  Court approval for this judgment was reached promptly and includes measures to deter future violations of similar labor laws.

Speaking of behalf of the DOL, Victoria A. Lipnic said recently, “This settlement provides $33 million in back wages, plus interest, to Wal-Mart workers, and the company has taken corrective action to prevent this from happening again.”  Lipnic is the Assistant Secretary of Labor for Employment Standards.

According to the recent consent judgment, Wal-Mart failed to include incentive and other premium payments when computing overtime pay.  As an example, a base hourly pay rate of $6.00 that is regularly supplemented by the premium payments may generate regular earnings of $7.00 per hour.  It is the higher, $7.00, rate of pay on which the overtime wages must be calculated.

State and federal labor laws recognize a full-time standard work week as consisting of 40 hours.  Any work performed in excess of the 40 hours must be paid as overtime at a rate of 1.5 times the regular hourly wage.  In the example above, overtime must be paid at a rate of $10.50 per hour (or 1.5 times $7.00), not the $9.00 per hour (1.5 times $6.00) initially paid by Wal-Mart. 

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