Thousands of Wal-Mart employees across the country will soon be paid back wages for overtime work. Wal-Mart, which of course has several stores in South Florida, was investigated by the U.S. Department of Labor in 2007, who found that the company violated the Fair Labor Standards Act’s overtime provisions.
The company has now been ordered to pay $4.8 million to employees as well as almost a $500,000 civil penalty. Under a settlement with the Department of Labor, Wal-Mart agreed to pay employees back wages in addition to damages. Affected employees will be paid through a third-party, according to a news report.
Thousands of Wal-Mart employees were denied proper overtime pay and will be paid back as a part of this settlement.
The wage and hour division’s deputy administrator has said that she hopes this highly-publicized and large scale settlement is a warning to other U.S. employers. In Wal-Mart’s case, the business was inaccurately classifying their employees as exempt in order to avoid paying overtime.
It is very important that employers properly classify their employees. Because of a complicated intersection of state and federal employment laws, it can be quite difficult for employers to do this and for employees to know whether they are being lawfully compensated for their work. Both employees and employers are wise to contact an employment law attorney about these matters to ensure they are following wage and hour laws.
As is demonstrated by the Wal-Mart case, the civil penalties for breaking these laws can be quite steep. And, of course the effect on the employees who are not promptly paid for overtime work can be damaging as well.
Source: Business Insurance, “Wal-Mart to pay $4.8M in back wages for violations of Fair Labor Standards Act,” Judy Greenwald, May 2, 2012