Wal-Mart computed overtime pay for workers in Wisconsin and throughout the U.S. in a way that underpaid them, and did not comply with federal and Wisconsin overtime laws. That’s according to the U.S. Department of Labor, in its announcement that Wal-Mart has agreed to pay more than $33 million in back wages to 86,680 workers nationwide.
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.
To back up the agreement, the Labor Department obtained a consent judgment against Wal-Mart ordering it to pay the back wages and forbidding it from similar violations in the future. The consent judgment was obtained by filing a complaint against Wal-Mart Stores, Inc., in U.S. District court. The court’s consent judgment required Wal-Mart to pay the back wages and interest on the $33 million.
Wisconsin is another one of the 50 states that we should take a careful look at regarding their overtime labor laws, if only because the state has its own unique overtime exemptions for certain occupation types and job groupings.
Otherwise, Wisconsin has a lot of the same regulations regarding overtime that we’ve seen on both the federal level and on the state level around the country. That is, employees must be paid at least one and a half times their normal pay rate for any work they complete over 40 hours in one week.
Wisconsin also, however, does have its own stance on overtime in certain other elements of regulation. For instance, when the federal government amended its overtime labor laws in August of 2004, Wisconsin announced that workers in the state receiving overtime pay would still be protected under the state’s overtime labor laws. Previously, the federal law on overtime had come from the Fair Labor Standards Act.
Wisconsin law also has its fair share of exemptions for people who do not get overtime pay protection under the state law. These exemptions include professional, administrative, and executive type workers, who earn a salary, who are also exempt from the federal law.
Wisconsin law also exempts outside salespeople who spend at least 80 percent of their work time away from the home office. Commissioned salespeople and other employees who get at least 50 percent of their pay from commission, and who at least earn time and a half of minimum wage for their hourly pay, are also exempt.
Taxicab drivers, people who sell cars, trucks, farm equipment, and many other types of vehicles, vehicle mechanics, employees of seasonal entertainment and recreation centers that are open less than 7 months out of the year, and funeral home employees are also all exempt from the law in many instances.