Wal-Mart to Pay $4.8 Million in Backwages, Damages to U.S. Employees

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By EW News Desk | May 3, 2012 9:33 AM EST

Economy Watch

Wal-Mart Stores Inc, the world's largest private employer, has been ordered to pay $4.8 million in back wages and damages to more than 4,500 of their employees across the United States, after the U.S. Labour Department found the company guilty of violating federal regulations requiring overtime pay from 2004 to 2007.

According to a Reuters report, the company failed to pay overtime to certain employees - namely vision-centre managers and asset-protection coordinators - as they thought them to be exempt from overtime requirements, when in fact they were not.

"When the issues resolved today were initially raised, we took them seriously and fully cooperated with the Department of Labour to make sure they were corrected in 2007," said Wal-Mart spokesman Greg Rossiter.

"We adjusted our pay practices at that time and determined that back wages should be paid for the associates involved," he added, as quoted by the Associated Press.

The terms of the compensation package dictate that set-protection coordinators will be entitled to an average of $290 each, while vision centre managers receive $2,300. Wal-Mart will also have to pay $464,000 in civil penalties in order to settle the case.

But the case, coupled with previous reports of workplace violations, have rattled investors and reinvigorated Wal-Mart's critics.

In 2007, the Labour Department found the retailer guilty of owing up to $34 million in back wages to 87,000 workers - some of whom were owed more than $10,000 each.

"The fines Walmart must pay for its overtime violations are just another side effect of the company's growth at any cost strategy," said a statement from Making Change at Walmart, a organisation backed by the United Food and Commercial Workers Union.

"Walmart's top executives and the Walton heirs who own a majority of the company have shown they are willing to break the law and harm workers in the name of more profits."

Related: Infographic: The Walmart Economy

The U.S. Justice Department has also been conducting a criminal probe of the company since December to determine whether it violated the U.S. Foreign Corrupt Practices Act.

Let this be a signal to other companies that when violations are found, the Labour Department will take appropriate action to ensure that workers receive the wages they have earned," said Labour Secretary Hilda L. Solis to the Washington Post.

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The article was first published by Economy Watch.

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