Wal-Mart workers in Pennsylvania, New Jersey and Delaware will receive $1.9 million in back wages as part of a $33 million settlement that the nation's largest retailer negotiated with the U.S. Department of Labor.
The settlement, announced Thursday, covers 86,680 workers nationally. The department said yesterday that the total includes 3,939 Wal-Mart employees in Pennsylvania, New Jersey and Delaware. The money is intended to compensate workers for missed overtime pay.
The settlement took place after Wal-Mart asked the Labor Department to audit its payroll records between Feb. 1, 2002, and this Jan. 19, spokesman John Simley said.
The audit also found that 215,000 workers nationwide had received too much overtime pay, but Wal-Mart said it would not try to collect that from the workers. Simley would not say how much the overpayment was, but said it was slightly higher than the $33 million underpayment.
"I don't think it has any impact on any of the outstanding private wage-and-hour cases against Wal-Mart throughout the country, but it does show that Wal-Mart has had a systemic and widespread problem in properly paying its employees," said Michael Donovan, a partner in Donovan Searles L.L.C. in Philadelphia.
Donovan represents 187,000 current and former Wal-Mart employees who won a class-action lawsuit against the company in Philadelphia last year.
On Oct. 13, a Philadelphia jury awarded $78.5 million to the employees. After a six-week trial, the jury found that Wal-Mart failed to pay employees for their rest breaks, as promised. It also forced them to work off the clock, without pay.
The judge in the case, Philadelphia Common Pleas Court Judge Mark Bernstein, is expected to issue a ruling soon on additional penalties in connection with state wage-and-hour and contractual laws. Those penalties could add up to about $62 million, Donovan estimated.
Wal-Mart said it would appeal. The class-action case covers pay missed between March 1998 and May 2006.