Complying with federal and Wyoming minimum wage laws was at the heart of a settlement Wal-Mart Stores, Inc. recently made. The company violated the Fair Labor Standards Act (FLSA) according to the US Department of Labor. Because of this, Wal-Mart has agreed to pay $33 million in back pay to 86,680 employees located in Wyoming and other parts of the nation.
Wal-Mart’s violation concerned how the nation’s largest retailer paid overtime to employees who worked more than 40 hours per week. FLSA mandates that overtime be paid at the rate of 1.5 times the usual salary of the employee. This agreement covers time worked by employees from February 1, 2002 through January 19, 2007.
According to Victoria A. Lipnic, Assistant Secretary of Labor for Employment Standards, “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.”
The US Department of Labor filed a complaint against the retailer in the US District Court. Violations of the overtime provisions and state minimum wage laws were the contents of the compliant. In the next step, a consent judgment was issued that ordered Wal-Mart Stores, Inc. to pay back wages. This consent judgment also enjoined Wal-Mart from additional violations. The court promptly approved the consent judgment.
Wal-Mart Stores, Inc. is paying this money because of the way in which it calculated overtime pay. The law is that workers must be paid overtime that is calculated from their hourly pay using the amount that is their average compensation per hour.
In this case, the giant retailer was not taking into consideration what the employees earned once premiums and incentives were added to their base rate. For instance, an employee might have a base rate of $6.00 per hour but normally earn $7.00 an hour once premiums and incentives were added.
A miscalculation of overtime payments has cost one of the nation’s largest retailers dearly.
The US Dept of Labor reported recently that Wal-Mart Stores, Inc. has agreed to pay more than $33 million in back wages after violating federal and Wyoming overtime laws.
Wal-Mart was found to have not applied the proper calculations when working out overtime payments to workers who normally benefit from incentives or premium payments. Under the law, an employee is entitled to overtime payments equal to that of 1.5 times their hourly rate if they work over 40 hours a week. But Wal-Mart did not take into account the employees incentive payments or premiums.
This means that, for example, an employee’s hourly rate was $6.00 per hour, but with incentives, they would normally earn $7.00 per hour. Their overtime payment would be 1.5 times $7.00 per hour. The overtime rate should be based on the hourly rate including incentives.
Wal-Mart was found guilty of only paying employees 1.5 times their basic hourly rate.
The $33 million covers back payments for 86,680 throughout the United States, for the period February 1, 2002 to January 19, 2007. As well as the back wages owed to employees, Wal-Mart has agreed to pay interest on the amount. It was thought that this would act as a deterrent against similar violations in the future.
Speaking about the judgment, the Assistant Secretary of Labor for Employment Standards, Victoria A Lipnic said, “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.”
Wal-Mart was found to have violated the Fair Labor Standards Act, or FLSA, which states that employees who are covered by the act are legally entitled to receive overtime payments at the rate of 1.5 times their usual hourly rate, for each hour they work over their standard 40 hour week.
The state of Wyoming doesn’t have its own state law for overtime labor regulations, but that doesn’t mean that it’s not worth our attention. The state employers, or at least many of them, still have to follow certain other overtime labors laws, namely those from the federal government. These laws are contained in the Fair Labor Standards Act, the FLSA.
The Fair Labor Standards Act covers many other topics, such as minimum wage regulations and child labor laws, but for our purposes, it’s important to consider what the FLSA says about overtime.
In that case, the basic federal rule, and thus the main overtime rule for many employers in Wyoming, is that employers have to pay time and a half to their employees for any time that they clock in over 40 hours in a week.
One of the most significant aspects of the federal overtime laws, which employers and employees in Wyoming should know about, is that there are exceptions to the rule, which means that it’s not mandatory that certain types of workers get overtime pay.
Some of these exceptions include employees considered executive, administrative, or professional in their job function. This includes teachers and principals and other administrative people at schools. Outside sales employees are also exempt, as are certain people in the IT-related fields.
In Wyoming, and in other states where the federal law is the main overtime law, people who work at seasonal amusement and entertainment centers are also exempt from overtime. The list goes on to include people working at small newspapers, fishermen and other seamen, and newspaper delivery people.
Farm workers on smaller farms—or farms that use less than 500 man days of employment in a quarter—are also exempt, along with casual babysitters and people who look after the sick and the old.