Where do I work now? Wal-Mart?
Where do I work now?

Suits Say Wal-Mart Forces Workers to Toil Off the Clock


KANSAS CITY, Mo. - After finishing her 10 p.m. to 8 a.m. shift, Verette Richardson clocked out and was heading to her car when a Wal-Mart manager ordered her to turn around and straighten up the store's apparel department.

Eager not to get on her boss's bad side, she said, she spent the next hour working unpaid, tidying racks of slacks and blouses and picking up hangers and clothes that had fallen to the floor. Other times after clocking out, she was ordered to round up shopping carts in the parking lot.

Some days, as soon as she walked in a manager told her to rush to a cash register and start ringing up purchases, without clocking in. Sometimes, she said, she worked for three hours before clocking in.

"They wanted us to do a lot of work for no pay," said Ms. Richardson, who worked from 1995 to 2000 at a Wal-Mart in southeast Kansas City. "A company that makes billions of dollars doesn't have to do that."

But she and 40 other current and former Wal-Mart workers interviewed over the last four months say Wal-Mart has done just that, forcing or pressuring employees to work hours that were not recorded or paid. Federal and state laws bar employers from making hourly employees work unpaid hours.

Wal-Mart's policies forbid such work. But many current and former workers and managers said an intense focus on cost cutting had created an unofficial policy that encouraged managers to request or require off-the-clock work and avoid paying overtime.

Accusations like these are at the heart of a wide-ranging legal battle between Wal-Mart and employees or former employees in 28 states. In class-action and individual lawsuits, workers assert that these practices have helped Wal-Mart undersell the competition, push up profits and become the world's largest retailer.

In the process, these lawsuits contend, the company has cheated Wal-Mart employees and workers at its warehouse-store division, Sam's Club, out of hundreds of millions of dollars a year.

Wal-Mart officials insist that the off-the-clock phenomenon is minimal considering that the company has 3,250 stores and a million employees in the United States. The officials say the company, based in Bentonville, Ark., has a strong policy against such work, a policy that is spelled out in the handbook distributed to every employee.

"Off-the-clock work is an infrequent and isolated problem, which we correct whenever we become aware of it," said William Wertz, a Wal-Mart spokesman. "It is Wal-Mart's policy to pay its employees properly for the hours they work."

Mr. Wertz said managers who required or requested off-the-clock work were subject to disciplinary action, including dismissal.

Two years ago, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had worked off the clock.

But legal papers and interviews with workers suggest that the off-the-clock problems go far beyond Colorado. In depositions and in interviews with The New York Times, Wal-Mart employees in 18 states described these types of off-the-clock work:

Former employees at stores in California, Louisiana, New York, Ohio, Oregon and Washington said that many evenings when their stores closed, managers locked the front door and prevented workers - even those who had clocked out - from leaving until everyone finished straightening the store.

Workers said these lock-ins, which aim to prevent theft, forced many employees to work an hour or two unpaid and enraged parents whose school-age children worked at Wal-Mart. Wal-Mart officials acknowledged that employees were sometimes locked in but said the policy was to pay workers for every hour they were.

Employees at stores in six states said managers ordered them to clock out after their eight-hour shifts and then continue working.

"We worked off the clock pretty much every shift," said Shannon Snyder, who worked two years ago stocking the health and beauty aids department at a Wal-Mart in Paso Robles, Calif. "The manager said if our jobs were not finished, we had to clock out and finish our jobs so no overtime would show up."

Some employees said they frequently took it upon themselves to clock out after their regular shift and then return to work, with their managers' knowledge and approval. They said they feared that if they did not finish their daily tasks before going home, they would be written up or fired.

"You have to accomplish your job for that day," said Charlotte Johnson, who worked at Wal-Marts and Sam's Clubs in Georgia, Oklahoma and California for a decade before retiring this year. "If you don't finish it, you're more or less in hot water with your manager."

A dozen Wal-Mart workers, including four in the payroll department, said managers deleted hours from employee timecards to avoid paying overtime. Wal-Mart officials said the company strictly forbade this practice and disciplined managers who did it.

Several current Wal-Mart employees said that despite the lawsuits, the problems continue. Alan Peto, who works at a Sam's Club in Las Vegas, said he worked off the clock several times each week while overseeing the electronics and hardware departments several years ago.

"They give you a lot of work to do, and there is no possible way to do that in the seven and a half or eight hours you've been assigned," he said. "So you feel pressure to clock out and do what you need to do."

Rewarding the Cost-Cutter

Although company policy prohibits off-the-clock work, Wal-Mart has created a system of rewards and punishments that critics say gives managers strong incentives to demand such work.

Under one bedrock policy, described in a deposition by a senior payroll executive, store managers are ordered to keep payroll costs below a target that headquarters sets for every store. If a store misses its target, several former executives said, the store manager faces a reprimand and sometimes demotion or dismissal.

Another policy strongly discourages overtime pay. A Wal-Mart handbook says managers are not to schedule workers for overtime, and several former store managers said the district and regional managers above them continually warned of a "zero tolerance" policy toward overtime, except during the busy holiday season. These former managers said managers were frequently reprimanded when they allowed workers to clock more than 40 hours in a week, enabling the workers to receive time-and-a-half pay.

Most hourly Wal-Mart workers earn less than $8.50 an hour, which amounts to $17,680 a year for a full-time worker.

Lawsuits surge as more workers demand payment for overtime hours

Associated Press

NEW YORK - There were years, Omar Belazi says, when he willingly logged 65-hour weeks, stayed late to vacuum the store's floor and clean the bathroom, and surrendered his Sundays to hit sales targets.

But a decade later he grew tired of waiting for the payback. "It gets to be very stressful, very tiring. You just get up and go to Radio Shack and go home and go to sleep," said Belazi, a former store manager for the electronics chain in Santa Barbara, CA. "They gave me all these awards, but it didn't do me any good. They didn't pay me."

A growing number of workers like Belazi are demanding more from their employers. The result: a flood of lawsuits by employees, many in arguably "professional" jobs, who accuse their companies of cheating them out of overtime pay.

The surge in claims - some resulting in multimillion-dollar settlements - is part of an intensifying debate over overtime pay and who is entitled to it.

In part, the debate reflects the fact that Americans are working more hours - longer than their counterparts in every other industrialized country - and that employers are trying to stretch productivity. But it also hinges on changes in the jobs people do and what those jobs are called.

With manufacturing jobs dwindling, more workers now toil for service-industry employers who pay salaries and give people hard-to-define titles like "analyst," "manager" and "administrator."

Federal law says employers do not have to pay overtime to salaried workers in executive, administrative or professional jobs. But the law, the Fair Labor Standards Act, has undergone only limited revision since the 1970s. It relies on some outdated salary figures and terminology that leaves room for broad interpretation. And employers and employees have had some very different ideas about what is a professional and what constitutes fair pay.

Radio Shack agreed in July to pay $29.9 million to settle a lawsuit led by Belazi on behalf of 1,300 current and former California store managers. The workers contended they were owed overtime because the company made virtually all managerial decisions at higher levels, and mandated that they spend most of their hours as salesmen. The payment by Radio Shack is the most recent in a series of very large settlements in California, which has a law that grants overtime pay to a broader group of workers than federal law does. This spring, Starbucks agreed to pay a group of California store managers $18 million to settle an overtime lawsuit. SBC Pacific Bell agreed last December to pay some engineers $35 million.

"It's become the cause of action du jour in California," said Mark Hill, senior vice president and general counsel for Radio Shack, which has denied any wrongdoing and notes that its store managers' average pay is $60,000 a year. "These are not underpaid hourly workers who are being mischaracterized as salaried workers simply so an employer would not have to pay for long hours worked."

Elsewhere, drugstore chain Eckerd Corp. paid $8 million last year to settle a lawsuit brought by two former pharmacists at a store in Moss Bluff, La., on behalf of nearly 1,100 others. The lawsuit accused Eckerd of docking the druggists' supposedly fixed salary if they worked less than 40 hours. But the company would not pay them more when they worked beyond their scheduled shifts, the workers said.

"How can you tell me I'm a salaried employee if I have to sign a time sheet?" said Kevin Soileau of Florien, La., one of the pharmacists who sued.

Eckerd denied any wrongdoing and said it settled merely to avoid the expense of a drawn-out court battle.

Wal-Mart Stores Inc. is fighting 38 state and federal lawsuits filed by hourly workers in 30 states, accusing the company of systematically forcing them to work long hours off the clock. Wal-Mart settled another such case in Colorado two years ago - reportedly for $50 million, though the company will say only that the actual amount is far less than that.

"The instances alleged are isolated and infrequent and we have a policy that allows us to pay hundreds of thousands of associates properly every day," Wal-Mart spokesman Bill Wertz said. Labor advocates and lawyers for workers say they are protecting employees from persistent attempts by employers to skirt the laws on overtime.

But employers argue that outdated labor laws have become a weapon for attorneys to win undeserved overtime pay for already highly paid employees.

The law "was put in place to make sure workers at the low-end of the pay scale are paid a fair day's wage for a fair day's work and it's gotten away from that," said Timothy Bartl, assistant general counsel for the Labor Policy Association, which lobbies on behalf of corporate personnel officers.

Employers may soon get some of what they are after. The Labor Department is pledging to update regulations to clarify which workers are covered by the law and focus its protection on those in low-wage jobs.

Some white-collar workers say they deserve protection as much as their lower-paid counterparts do. "The law doesn't say that this is only for people making $12 an hour but not if you're making $35 an hour," Soileau said.

The Associated Press. Published August 3, 2002

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