Expensive settlement in failure to pay employees
December 11, 2008 by Fred HosierPosted in: Here comes the judge, In this week's e-newsletter, Latest News & Views
A class action lawsuit against Wal-Mart means bad news for the discount retailer.
Wal-Mart will pay up to $54.3 million to settle the lawsuit in Minnesota.
About 100,000 current and former hourly employees who worked at Wal-Mart and Sam’s Club stores in the state from September 1998 to November 2008 are included.
Employees claimed they were forced to work without pay so Wal-Mart could meet its profit and productivity goals.
One worker, Debbie Simonson, said she was asked to straighten her area of a store “off the clock” before and after her shifts for two years.
Wal-Mart has been hit with similar lawsuits, including one in Oregon where employees were forced to work unpaid overtime between 1994 and 1999.
Wal-Mart said its policy is to pay every worker for every hour worked and managers who don’t abide by that are subject to discipline, including being fired.
December 12th, 2008 at 10:18 am
This type of management and bullying employees is exactly why I have never purchased anything from Wal-Mart or Sams Club. “Lower prices” because they are cheaters and underhanded in many ways. They have put so many honest, hard working small business owners on the unemployment line – shame on them.
December 12th, 2008 at 11:14 am
The beauty of our country is that consumers have choices. Consumers can choose to use their purchasing power in small businesses or at Wal-Mart. I am a small business owner and I have found Wal-Mart and Sams Clubs to be very generous in their communities. They also have provided employment in areas where jobs are scarce.
December 12th, 2008 at 11:23 am
Its not just walmart, it also happens at small retailers. Just bad managers out in the workforse who love taking advantage and don’t obey wage and hour laws.
December 12th, 2008 at 11:26 am
Just because WALMART settled this suit, doesn’t mean that they violated rights or broke the law. They simply saw that it made better business sense to settle than to continue with the legal process and pay lawyers and other fees. Most HR professionals know about the Seven minute rule and the FLSA. To this day, people are confused about it, but it is still there. A worker will complain and make a mess over having to do work up to seven minutes before their scheduled start time if they are only going to get paid as starting on time. However, this same employee will expect that if they show up up to seven minutes late to be paid as if they showed up on time. In addition, if you try to disipline for lateness, they will throw a fit.
This unrelenting drivel about WALMART hurting jobs is the same drivel about Honda and Toyota. First, they are AMERICAN companies in that they employ AMERICAN WORKERS. My last GM car was made in MEXICO and CANADA and sold to me as an AMERICAN car. My friend bought a Toyota made in the USA. Who really bought American?
Second, the argument is that some of these companies are OWNED by foreigners, which is not good for the economy. I would submit then, that our country is OWNED by China and other investors who give our government loans to bail out the AMERICAN institutions.
December 12th, 2008 at 11:34 am
Wal Mart needs some serious HR consulting assistance. Where was Human Resources during this? It is never OK to ask hourly employees to engage in work “off the clock”.
December 12th, 2008 at 11:35 am
Wal-Mart has long disappointed me in the way they treat their employees. I’m sure there are exceptions…stores where the management group is professional and ethical…but by and large, their overall corporate policy seems to be that of placing little value on their employees and of sometimes taking advantage. It didn’t use to be that way prior to Sam Walton’s death. I would hope that a large and successful business such as Wal-Mart would set an example of how to do it right because they have resources many of us can only dream of. Instead, they often seem to set an example of how not to treat and work with employees.
December 12th, 2008 at 12:14 pm
Wal-Mart is one of the most evil and corrupt organizations on the face of the earth. The leadership of this organization engages in deliberate criminal acts; whether they be underpaying or not paying employees, engaging in predatory pricing or engaging in bribery with local politicians to approve their stores. While they may occasionally endow certain programs to help local communities, this is simply a smoke screen to hide their nefarious activities. Google Wal-Mart and look for legal action against this organization over the last 15 years and research,read and come to your own conclusions.
December 12th, 2008 at 3:48 pm
To Kevin:
I’m sure no HR manager would tell employees to “work off the clock.” However, what does HR tell houlry employees concerning how their payroll is time is rounded? Most use the “7 minute rule” that says if you clock in at 7 til the hour you get paid as though you came in on the hour. Employees are required to not hang around when off the clock. When they arrive they clock in. If they are on the clock, they work. If they show up before the hour (within 7 minutes), they don’t get any pay for that work. If they clock out 7 minutes after the hour, they don’t get paid for that. This applies only to paying hourly employees.
If an employee clocks in 7 minutes after the hour and clocks out 7 minutes before the hour, he/she will get paid as though they clocked in and out on the hour. They would recieve discipline for clocking in late and leaving early, but paid legally.
December 12th, 2008 at 5:06 pm
Mike – I don’t think Kevin was talking about the 7 minute rule when he referred to working “off the clock”. Wal Mart has been nailed in the past for having people clock out, and then return to their work station and continue to work/clean/etc. until their daily work is done. This “working off the clock” is clearly illegal. One other point, at our company we use bar code scanners for clocking in and off the job. In that case there really is no “7 minute rule” as there is no rounding involved, and the “de minimus” standards would be in seconds.
December 13th, 2008 at 1:40 pm
I work for an Independent Supermarket, I know first hand how Wal-Mart can affect the small business owners. Shame on them for making this kind of mistake. I can assure you that Wal-mart did not just think it made better sense to settle than to continue with the legal process – they have such deep pockets, nothing stands in their way. Maybe they should rethink their strategy being cheap isn’t always the best alternative. They should try investing in their people!
December 30th, 2008 at 6:06 am
[...] out, a recent settlement between Wal-Mart and Minnesota over wage-and-hour violations was just the tip of the iceberg for [...]