Wal-Mart is a corporate colossus. The statistics are staggering: It employs 10 percent of the nation's workforce--around 1.5 million employees, and 6,400 in Idaho--and with annual sales of over $256 billion, it produces over 2 percent of the national gross domestic product. Excluding automobiles, Wal-Mart accounts for 8 percent of American retail sales. The slogan of "everyday low prices," is truly a siren's call to our nation's shoppers.
One of the ways Wal-Mart maintains these low prices is through a fierce minimization of costs. Frequently, this comes at the expense of Wal-Mart employees. The company has been unwavering in its stance against unions, and is notoriously crafty how it provides--or fails to provide--employee benefits. As a third chapter to this marginalization of the nation's working poor, Wal-Mart is being accused of not even paying its employees accurately.
In 2000, Wal-Mart settled a $50 million Colorado class action lawsuit, which claimed 69,000 employees were not accurately compensated for their hourly work. This is not an isolated accusation. In 2004, the New York Times quoted Wal-Mart managers stating they had deliberately altered workers' hours through manipulation of electronic timekeeping records--frequently to prevent workers from acquiring any overtime hours. In other cases, managers would use a practice called "the one-minute-clock-out," where workers who forget to clock in after lunch are later clocked-out by a manager at one minute after their initial clock-in time. They don't get paid for the rest of their workday. Multiply these practices with the staggering number of Wal-Mart workers and the company could be making off with millions of dollars that should go to employees.
Now accusations of these unfair labor practices have shown up in Idaho. Paul Echohawk of Echohawk Law Offices in Pocatello has filed a $7 million civil complaint against Wal-Mart in Idaho Federal District Court, demanding resolution of current and past Wal-Mart hourly employees' wages that, he says, have gone unpaid.
The complaint claims to expose a corporate policy of payroll record manipulation and other dishonest practices whereby Idaho Wal-Marts do not pay employees for time they worked, even when the time may have been recorded in Wal-Mart's databases. Investigations cited by Echohawk Law Offices say managers at Idaho Wal-Marts had manually edited time records to indicate that their employees were on a meal or break, while in fact, the employees were working. The complaint also alleges Wal-Mart managers routinely implemented the one-minute-clock-out practice, often denying employees four or more hours's worth of pay. EchoHawk told BW Wal-Mart is very aware of the nature and extent of their wrongdoing, and to date has done nothing to make amends to Idaho's Wal-Mart hourly employees.
One former manager of a local Wal-Mart, who will be called as witness by Echohawk if the complaint leads to a trial, told BW agrees with the allegations. He said the problem lies not only with bad corporate policy, but an environment that encourages salaried employees to rip off hourly employees. He said he was also directed to follow a one-minute-clock-out procedure. Payroll is finalized daily at Wal-Marts, so once midnight rolls around, the payday (or lack thereof) is official.
"It happens about 20 times a day at any given Idaho Wal-Mart," he said. "The only accountability is if the employee catches it... the managers forget about it, and it is very rare that employees study their payroll stubs that intently. A loss of 30 or 40 dollars usually goes unnoticed."
According to the complaint, another of Wal-Mart's managerial directives is to strictly avoid giving hourly employees overtime, even if they have qualified for it. When and if the employees notice a discrepancy in their pay, it would usually no longer be subject to the week in which the hours originated--and federal law prohibits transfer of hours from one week to another
Wal-Mart's corporate push against overtime hours also allegedly extends to punishing those managers who refuse to cheat their employees. In 2004, according to the complaint, the managerial directive was to allow no more than 10 hours of overtime per store each week. When this directive was broken, a manager was "coached" or disciplined. After two coachings, the manager was demoted or fired. Though Wal-Mart hourly wages are below the national average, managers can make a substantial annual salary--one that some might feel isn't worth losing over a few of somebody else's overtime hours.
Past Pocatello Wal-Mart employee Reginald Jackson, one of the complainants represented by Echohawk, says he suspects employee shortchanging happens all the time. "An hour deletion here or there usually goes unnoticed," he said, "and it is rare that an associate would challenge upper management over a few hours of time." Another confounding variable, Jackson and other Wal-Mart employees said, is that they received no payroll records documenting the hours they worked. He and many other Idaho Wal-Mart employees say they feel cheated.
"Wal-Mart's payroll practices are an outrageous example of one of the country's largest corporations unfairly earning extra profits at the expense of some of American's poorest working citizens," added Echohawk. He confirmed that similar lawsuits have been filed in a number of states already, and he said he expects this litigation to change the way Wal-Mart treats its hourly employees.
Calls by BW to local Wal-Mart managers typically resulted in us being referred to the store's corporate legal and media relation departments. In one case, a local manager had apparently been notified of our inquiry by another manager, and he hung up on us. After leaving repeated messages, we were contacted by a Wal-Mart media representative who said that while the one-minute clock-out is not a mandated procedure, some associates have used it in the past to punish employees for not clocking in. She said the store has recently implemented a policy whereby payroll associates are directed to attempt to determine how many hours a forgetful employee worked and notify them the next time they clock in.