labor lawAdivision of labor law center

According to a recent court settlement, Wal-Mart violated federal and Pennsylvania overtime laws when it under-calculated overtime pay for its employees, according to the U.S. Labor Department.

The price tag for violating a labor law on overtime compensation is no discount - the nationwide retailer must now pay $33 million in back pay to 86,680 employees around the U.S.

The reimbursement puts Wal-Mart in compliance with federal and Pennsylvania minimum wage laws.

The U.S. Labor Department alleged that Wal-Mart violated the Fair Labor Standards Act, or FLSA. The retailer under-calculated the overtime for the employees by using their “base rate” rather than their “average hourly compensation,” which is a larger number. All employees must be paid 1.5 times their pay for any hours over 40 hours. It’s customarily called “time-and-a-half.”

But the law says the 1.5 must be calculated according to the employee’s base pay plus premiums and incentives – in other words, the “average hourly compensation” The “base rate,” which Wal-Mart was using, is the pay without premiums or incentives. For example, if $6 an hour is the base rate but the employee gets, on average, $7 with premiums and incentives, then $7 is the figure that must be used for overtime payment.

“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,” said Victoria A. Lipnic, Assistant Secretary of Labor for Employment Standards.

The Labor Department also obtained a consent judgment from U.S. District Court. In the complaint with that court against Wal-Mart Stores, Inc., the Labor Department alleged that the retailer violated the overtime provisions of the Fair Labor Standards Act, or FLSA as well as state minimum wage laws. The court issued a consent judgment ordering Wal-Mart to make the back payments and ordered it to abstain from any future violations. The agreement has Wal-Mart paying all back wages for the violations, plus interest on the amount as a deterrent.

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1. Posted by: daniel golden

   I have worked at [company name deleted] in Mercersburg PA for 3 years. They will not pay us overtime and since they were audited they no longer give us paystubs, just checks. They also require us to have shaves and haircuts weekly or pay them a fine for not complying to their rules although they have never given us a written statement of this. They have, however, given us written statement that we must have a valid drivers license to be employed with them. They currently do not have any installers that do have a legal drivers license although they drive company vehicles. One was recently in an automobile accident with a company van. They keep a safe in their office locked of cash money for jobs they do for cash that is not turned in income. They do jobs in West Virginia and are not licensed in that state so he charges cash for those jobs.

2. Posted by: Amelia

   Daniel, start by contacting the US Department of Labor, and the Pennsylvania Department of Labor & Industry. By law, the employer must give you check stubs, and must pay overtime. Usually they cannot fine employees.

   For detailed answers to your questions, post them on our sister site, http://www.laborlawtalk.com.

   Thanks for reading! Amelia