Retail giant Wal-Mart is paying out $33 million in back wages after being accused of underpaying more than 86,000 workers in overtime pay.
Wal-Mart’s agreement to pay the amount puts it in compliance with federal and Minnesota Overtime laws, according to the U.S. Department of Labor. The Labor Department said the retailer used the wrong pay figures to calculate overtime in Minnesota and throughout the U.S.
Wal-Mart, said the Labor Department, calculated overtime according to the “base rate” rather than the “average hourly compensation,” a larger number. The “base rate” does not include incentives and premiums. The “average hourly compensation” does. The Fair Labor Standards Act, or FLSA, requires that employers calculate overtime based on the “average hourly compensation.”
“This settlement provides $33 million in back wages, plus interest, to Wal-Mart workers,” said Assistant secretary of Labor for Employment Standards Victoria A. Lipinic, who added that the company “has taken corrective action to prevent this from happening again.”
Employees are legally entitled to an overtime pay equaling 1.5 times their usual pay –usually called “time-and-a-half.” And according to the FLSA and the Labor Department, that figure should be the “average hourly compensation.” For example, if the base rate is $6, and the rate with incentives and premiums – the “average hourly compensation” – is $7 an hour, overtime must be calculated using $7 an hour. Overtime is any time exceeding 40 hours in a workweek.
The agreement between the Labor Department and Wal-Mart covers the back wages for 86,860 workers for a nearly five-year period, from February 1, 2002 to January 19, 2007.
The Labor Department also filed a complaint in U.S. District Court to support the agreement, alleging violations of both the FLSA and state Overtime laws. The court returned a consent judgment.
Under the consent decree, Wal-Mart is paying all of the back wages for the violations, as well as interest on the total.
Minnesota (MN) wage and hour laws help establish a standard for all workers and businesses. These laws also help both employers and employees understand their rights and responsibilities.
Minnesota (MN) wage and hour laws address a variety if issues, such as increases in minimum wage. For example, as of August 1, 2005 the minimum wage received by Minnesota employees working for large employers rose from $5.15 per hour to $6.15 per hour.Minnesota (MN) wage and hour laws address a variety if issues, such as increases in minimum wage. For example, as of August 1, 2005 the minimum wage received by Minnesota employees working for large employers rose from $5.15 per hour to $6.15 per hour.After August 1, 2005 the minimum wage paid to employees working for small employers also increased. Their hourly pay rose from $4.90 per hour to $5.25 per hour. Minnesota (MN) wage and hour laws have also been increased for those workers in training, from $4.25 per hour to $4.90 per hour.
Tipped employees in Minnesota are paid a little differently than in most states. Minnesota (MN) wage and hour laws require that employees who earn tips must receive the same minimum hourly wage as employees who do not earn tips.
A meal break must be given to employees who work an eight hour shift or longer. The employer is not required to pay for this break if it is uninterrupted and is 30 or more minutes long. Minnesota (MN) wage and hour laws also require sufficient rest breaks for those who work four or more hours in one shift.
Minnesota (MN) wage and hour laws pertaining to overtime are different than that of federal wage and hour laws. The state of Minnesota recognizes work over 48 hours a week as overtime rather than the regular 40 hours a week as defined by the federal government. Some employees are not required to follow the 48 hour a week standard, however. These exceptions are listed in both Minnesota and federal wage and hour laws.
In some cases Minnesota (MN) wage and hour laws state that employees must be paid for travel time. Usually employers are required to pay for this time if it is travel that takes place during the course of a work day. Some employees may also pay for travel to and from places of employment, but they are not required by law to do so.
Both employers and employees are advised to keep track of current Minnesota (MN) wage and hour laws. These laws are updated periodically.
Minnesota will make our look at overtime law a little more exciting than those states that just defer to the federal governments laws on labor and overtime. That’s because Minnesota has its own regulations when it comes to overtime.
The biggest difference between Minnesota and the federal rules is the length of a work week. In the state of Minnesota, the duration is 48 hours, as compared to the standard and more familiar 40 hours.
Of course, not all businesses have to abide by the Minnesota law. As we’ve seen in other states, there is a split regulation between the state laws and the federal laws. Just because Minnesota has its own laws doesn’t mean that the federal laws just disappear. The federal laws have to deal with interstate companies and companies that pull in more than $500,000 per year in revenue.
Minnesota law, though, says that when a company falls under both federal and state laws—such as would a very large multinational company—then the employer must follow the overtime laws that set the higher standard.
But interesting enough, in many cases that makes Minnesota the higher standard. For instance, the new federal laws, put into effect in August 2004, that make changes to exemptions for white-collar workers such as professionals, computer workers, administrators, and sales people are not the higher standard, according to Minnesota law.
That means that in certain cases, these big companies wouldn’t have to pay overtime to certain employers according to federal law. But, and this is a big but, in state law, they would be required to pay that time and a half of overtime pay.
Still, Minnesota also has its own list of exclusions, such as professionals and other white-collar workers who make a certain amount of money per year, retail and service people who make commission, and people who work for commercial auto dealers on a commission basis.