Wal-Mart to Pay over $5 Million for FLSA Violations

The Department of Labor reached an agreement with Wal-Mart – and issued a stern warning to other companies -- after finding that Wal-Mart violated the overtime provisions of the Fair Labor Standards Act (FLSA) by misclassifying more than 4,500 employees as exempt from overtime pay.

The case involved Wal-Mart’s vision-center managers and asset-protection coordinators. Wal-Mart did not pay them overtime because it considered them exempt from the FLSA’s requirements for overtime pay, but a DOL investigation found that the employees were nonexempt. Wal-Mart and the DOL have been engaged in negotiations over back pay since 2007. In April 2012, Wal-Mart agreed to pay the employees $4,828,442 in back pay and damages. Wal-Mart will also pay $463,815 in civil penalties because of the repeated nature of the violations.

The Secretary of Labor said the case should send a “signal” to all companies: “Misclassification of employees as exempt from FLSA coverage is a costly problem with adverse consequences for employees and corporations. Let this be a signal to other companies that when violations are found, the Labor Department will take appropriate action to ensure that workers receive the wages they have earned.” Emphasizing the same point, a spokesperson from the DOL’s Wage and Hour Division said, “The damages and penalties assessed in this case should put other employers on notice that they cannot avoid their obligations to their employees by inappropriately classifying their workers as exempt.”

WeComply’s worker classification and Fair Labor Standards Act (FLSA) online courses offer training in how to distinguish between exempt and non-exempt employees, as well as other crucial real-world labor issues.

Categories: General Business Compliance
Tags: Worker Classification, FLSA