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January 26, 2007
Wal-Mart to Pay $34M for Incorrect OT Calculations

Wal-Mart Stores, Inc., has agreed to pay nearly $34 million in back wages and interest for calculating overtime incorrectly over a span of almost 5 years.

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The agreement with the Department of Labor covers 86,680 employees who worked for the company from February 1, 2002 to January 19, 2007.

The department says that Wal-Mart brought the matter to its attention after an internal audit raised concerns regarding overtime calculations.

Wal-Mart says it failed to include periodic bonuses and other earned income in determining some employees' regular rate of pay for overtime purposes. In addition, some overtime payments were based on a regular rate calculated for each two-week payroll period, when they should have been calculated weekly.

Separately, some errors involved participants in the company's manager and programmer in training programs, who were entitled to overtime pay while in training, the company says.

"We want our associates to know that the situation has been fixed, that overtime calculations now are being done correctly, and that we've added safeguards to our payroll processes to make sure these types of errors don't happen again," says Sue Oliver, senior vice president of the People Division at Wal-Mart. "The overtime issues relate to our payroll processes at the Home Office rather than any individual's actions at our stores or clubs."

In addition to paying back wages, the company also agreed to set up a website ( http://www.dol.settlement.wal-mart.com ) and to staff a toll-free telephone number to answer questions regarding the back wages. A third-party administrator will disburse the payments to the affected employees.

The company says it is also working to resolve a similar complaint filed by California's Division of Labor Standards Enforcement.

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