Wal-Mart Stores Inc. will pay more than $33 million in back wages to thousands of employees after turning itself in to the Labor Department for paying too little in overtime over the last five years, according to an agreement announced yesterday by the U.S. Labor Department.
Wal-Mart said a review of its overtime calculations also found it had overpaid about 215,000 hourly workers during the same five-year period. The company said it would not seek to recover any overpayments, which were at least $20 per worker.
Separately, California's labor commissioner filed suit against Wal-Mart for the share of overtime shortfalls in that state. The commissioner's office said in a statement that Wal-Mart had also voluntarily notified it of the problem and was working with the commissioner.
Steven Mandel, associate solicitor in the U.S. Labor Department's Fair Labor Standards Division, said the case - involving 86,680 employees nationwide - began because Wal-Mart came to the department early in 2005 to seek a review of its overtime calculations.
"They had some concern that some of the practices were not in compliance" with federal wage laws, he said in a conference call with reporters.
"It's not particularly unusual for an employer to come to us and talk to us about potential payroll violations," Mandel said.
But he said the overtime settlement was one of the largest reached by the department's wage-and-hour division.
Wal-Mart said that the settlement included no fines or penalties and that it had adopted measures to prevent the errors from occurring again.
"The fact of the matter is, we discovered this matter, we reported it to the Department of Labor, and we resolved the issue," company spokesman John Simley said. "We are committed to our associates, and we've apologized to them for this error."
Simley said Wal-Mart discovered possible mistakes in its formulas for overtime during a regular internal review. He said there was no connection between the company's reporting itself to the Labor Department and multiple lawsuits against the retailer in recent years by employees alleging payroll violations.
In October, Wal-Mart workers in Pennsylvania won a $78.5 million judgment for working off the clock and through rest breaks. Wal-Mart denied wrongdoing and is appealing the jury award.
One of Wal-Mart's most vociferous critics, union-backed WakeUpWalMart.com, said the overtime settlement announced yesterday favored the retailer rather than its workers.
WakeUpWalMart.com spokesman Chris Kofinis said that workers were not represented in the settlement talks and that the idea that Wal-Mart "would negotiate in the best interests of its workers is ludicrous on its face."
Mandel said the department carried out a national review of all Wal-Mart stores over a two-year period, from February 2005 to this year.
The settlement was approved yesterday by a federal judge in the U.S. District Court for Western Arkansas, Mandel said.