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Small Businesses Pay Their Employees. Wal-Mart Doesn’t.

| Written by Stacy Mitchell | No Comments | Updated on Feb 1, 2003 The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/small-businesses-pay-their-employees-walmart-doesnt/

In December, an Oregon jury found Wal-Mart guilty of forcing employees in eighteen stores to work extra hours without pay. A separate jury will determine damages in the class-action lawsuit.

Employees testified that store managers used a variety of tactics to extract unpaid labor, including requiring employees to work after they had punched out for lunch, locking the doors at night to prevent off-the-clock employees from leaving until certain tasks were complete, and manipulating employee timecards.

Carolyn Thiebes, a former store manager, testified that she routinely docked overtime hours from workers’ paychecks at the direction of her supervisors and pushed employees to work more than 40 hours a week without pay to finish assigned tasks.

Wal-Mart insists such practices are isolated and are not part of a company-wide strategy. But several former store managers have described intense pressure from Wal-Mart headquarters to keep labor costs low. They say the company made it impossible to meet the requirements without forcing employees to work unpaid hours.

Indeed, lawsuits against Wal-Mart for unpaid work are now pending in at least 30 states. Wal-mart “has ridden the backs of its hourly employees to extreme profitability,” reads one suit filed in Michigan. In many towns, Wal-Mart controls most of the retail employment, leaving workers little choice but to accept its terms.

So far, Wal-Mart has settled out of court in two cases, reportedly paying $50 million in a class-action suit involving 69,000 employees in Colorado and $500,000 in a case brought by 120 workers in Gallup, New Mexico. The Oregon case is the first to go to trial.

With more than one million employees nationwide, Wal-Mart’s free labor could add up to tens of millions of dollars, harming retail workers and giving the company a significant illegal advantage over small businesses that pay employees their full due.

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About Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance, and directs its Community-Scaled Economy Initiative, which produces research and analysis, and partners with a range of allies to design and implement policies that curb economic consolidation and strengthen community-rooted enterprise.  She is the author of Big-Box Swindle and also produces a popular monthly newsletter, the Hometown Advantage Bulletin.  Connect with her on twitter and catch her TEDx Talk: Why We Can’t Shop Our Way to a Better Economy. More

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