Wal-Mart Hit With $6.5 Million for Wage & Hour Violations
Yesterday, a Minnesota judge awarded a class of more than 56,000 Wal-Mart employees $6.5 million in back pay for meal and rest period violations. An October 20 penalties hearing could result in an additional $2 billion in damages.
The Facts
The employees alleged that Wal-Mart required them to work off the clock for training and didn’t allow full meal and rest periods in line with state law. Wal-Mart denied the charges and argued that it fully complied with state law.
One of the centerpieces of the case was a series of internal audits conducted by Wal-Mart itself. The audits showed that employees were missing breaks and one audit rated every Minnesota store “unsatisfactory” in the handling of rest periods. Wal-Mart tried to argue that the audits were flawed. The court rejected that argument, finding that it was Wal-Mart’s responsibility to correct or stop the audits if they weren’t accurate.
The court also pointed to the fact that Wal-Mart stopped using an electronic punch in/out system. Once it did so, it no longer had a means to track break periods accurately.
The Lessons
The primary lesson is pretty simple: pay employees for time spent working. Break periods aren’t break periods if employees aren’t truly relieved of their duties. With respect to meal periods, the Department of Labor states: “The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating.” The solution is simple as well: create a clear break policy and enforce it fairly and consistently.
Also, be careful when you conduct internal audits. They can be a great way to monitor and improve compliance. However, if you ignore the results and fail to make appropriate changes, you run the risk of creating Exhibit A for your next lawsuit.
(Special thanks to the Ohio Employer’s Law Blog)
