Wal-Mart Inc recently agreed to pay $33 million to 87,000 employees throughout the country. The reason is that signed an agreement with the US Dept. of Labor related to unpaid back wages.
The infractions committed by Wal-Mart represent a violation of federal and South Carolina overtime laws. In the future, the giant of retail could be involved in more lawsuits because the agreement signed refers only to specific violations. It does not affect other litigations and complaints presented by workers.
What were the infringements at Wal-Mart? The most important violation was related to incorrect payments to some types of workers. They were considered as “salaried exempt” managers, when they actually had the right to receive overtime pay. Some of the examples were programmer trainees, manager trainees and paid interns. They were considered salaried and they worked for long hours without being paid overtime.
To avoid paying overtime, one unethical tactic in the past was to hire employees and put them in management positions. That tactic was applied by Howard Johnson’s in the 80’s. Waiters or dishwashers were hired as “assistant managers” and worked long hours for little money, until the workers won a class action suit. In general, members of management receive good salaries and other compensation. It is often expected that they will work 10 or 12 hours per day, or perhaps more, with no overtime pay. They are the typical case of “salaried exempt” employees.
They are some guidelines to differentiate a “non-exempt” employee from one who is “exempt”. If the employee receives $23,660 per year or less (that means $455 per week), and works more than 40 hours he or she must be paid overtime. If the employee is paid more than $23,660 per year, exempt status depends on his or her job description. A salaried manager, in general, has the authority to employ or fire 3 or more members of the staff, and has important power to make decisions over a store, a division or department.
One of the arguments in Wal-Mart case was that the manager trainees that worked long hours, has little decision-making power, and in most circumstances, they received less than $455 per week.
