Wal-Mart strikes deal in OT Case

In the second-largest case of its kind, Wal-Mart Stores Inc. settled to pay more than $33 million to thousands of its employees who were shortchanged on overtime wages during the last five years. The case involves nearly 87,000 employees nationwide.

Steven Mandel, associate solicitor in the U.S. Labor Department's Fair Labor Standards Division, said that Wal-Mart approached the department in early 2005 and asked for a review of its overtime calculations.

Steven said, "They had some concern that some of the practices were not in compliance" with federal wage laws. It's not particularly unusual for an employer to come to us and talk to us about potential payroll violations."
Wal-Mart spokesman John Simley asserted that they discovered possible mistakes in its formulas for overtime during a regular internal review and immediately reported it to the Department of Labor to resolve the issue. He claimed that the company is committed to its associates (employees) and apologized to them for the error committed.

He also claimed that there was no connection between the company reporting itself to the Labor Department and multiple lawsuits against the retailer in recent years by employees alleging payroll violations.

During the review, Wal-Mart said it also found that 215,000 employees were overpaid by at least $20 during the same time period. However, Wal-Mart said it would not seek repayment.

As part of the agreement, approved Thursday by U.S. District Judge Robert Dawson in Arkansas, Wal-Mart will not pay any fines or penalties. Glenn Rothner, a Pasadena attorney who represents unions and workers in civil rights and employment cases, questioned the evenhandedness of the settlement.

But the Labor Department said the settlement was good because Wal-Mart agreed to pay five years of back pay, rather than the required two.

Wal-Mart also agreed to use a website, a toll-free phone number and a search firm to locate former employees affected by the agreement
The settlement would average about $386 in back pay and interest for each of the 87,000 Wal-Mart employees. The highest award to an individual employee was about $39,000.