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WAGES In some positions, Wal-Mart employees earn less than those performing similar jobs at other stores. As Of 2001 , according to US federal statistics, the average supermarket employee earned $10.35 per hour, industry-wide; in comparison, stock clerks at Wal-Mart made $8.23 per hour on average. A 2003 wage analysis reported that cashiers, the second most common job at Wal-Mart, earn approximately $7.92 per hour and work an average of 29 hours a week. This brings in annual wages of $11,948, about $1000 less than the United States federal Poverty Line for a parent and one child. Wal-Mart founder , May 4, 2005 Former managers have reported that they were judged by upper management based on their ability to keep payroll costs low, and that they sometimes pressured more senior, higher-paid employees, in the hopes that they would quit. {Link without Title} In a move some say to appeal to critics of Wal-Mart's hourly wages practices, CEO Lee Scott has advocated a federally-mandated raise in the minimum wage. {Link without Title} COSTS TO SOCIAL SERVICES Critics of Wal-Mart have argued that Wal-Mart indirectly incurs costs for federal social service programs, due to the low wages it pays its employees. A report by U.S. '', August 3, 2004 Sebastian Mallaby, a self-described Progressive , says that "it's ironic that Wal-Mart's enemies, who are mainly progressives," would be complain about Wal-Mart employees receiving Medicaid. He says: "In the 1990s progressives argued loudly for the reform that allowed poor Americans to keep Medicaid benefits even if they had a job. Now that this policy is helping workers at Wal-Mart, progressives shouldn't blame the company. Besides, many progressives favor a national health system. In other words, they attack Wal-Mart for having 5 percent of its workers receive health care courtesy of taxpayers when the policy that they support would increase that share to 100 percent." Mallaby, Sabastian ''Progressive Wal-Mart. Really.'' Washington Post. November 28, 2005; Page A21 However, given the comany's current revenue it is argued that Wal-Mart could easily afford to pay benefits instead of relying on public welfare. WORKING CONDITIONS The report by congressman Miller alleged that in ten percent of Wal-Mart's stores, nighttime employees are sometimes locked inside, making them unable to leave. In some cases employees who had sustained injuries requiring medical attention were forced to wait inside the store for hours for a manager to arrive and unlock the door. POTENTIAL HIRE SCREENING Wal-Mart, like many large American corporations with low-wage employees, screens potential hires through a Drug Test , in addition to a multiple choice personality test, which asks applicants to express their level of agreement with statements such as "rules have to be followed to the letter at all times." (Ehrenreich, 124) LABOR LAWS Off The Clock It is alleged that Wal-Mart's salaried managers have pressured hourly employees to work "off-the-clock" in order to avoid Overtime pay. As of the time of submission of Wal-Mart's 10-Q Report for the quarterly period ended October 31, 2005, the company faced "numerous cases containing class-action allegations in which the plaintiffs have brought claims under the Fair Labor Standards Act (“FLSA”), corresponding state statutes, or other laws. The plaintiffs in these lawsuits are current and former hourly Associates who allege, among other things, that the Company forced them to work “off the clock,” or failed to provide work breaks, or otherwise claim they were not paid for work performed." {Link without Title} Wal-Mart's 10-Q further details that "Class certification has yet to be addressed in a majority of the cases. Class certification has been denied or overturned in cases pending in Arizona, Arkansas, Florida, Georgia, Indiana, Louisiana, Maryland, Michigan, Nevada, New Jersey, North Carolina, Ohio, Texas, West Virginia, and Wisconsin. Some or all of the requested classes have been certified in cases pending in California, Colorado, Massachusetts, Minnesota, Missouri, New Mexico, Oregon, and Washington. Conditional certifications for notice purposes under the FLSA have been allowed in cases in Georgia, Michigan, and Texas." In 2000, 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. These employees, as well as several former managers, have testified that Wal-Mart had an unofficial policy requiring off-the-clock work, to keep the cost of payroll down. {Link without Title} Class-action suits were filed in 1995 on behalf of full-time Wal-Mart pharmacists whose base salaries and working hours were reduced as sales declined, resulting in the pharmacists being treated like hourly employees. Initial judgments ruled in favor of the plaintiffs, but an appeal by Wal-Mart resulted in the cases being remanded to a lower court in February 2005 due to insufficient evidence that Wal-Mart committed the offense often enough that the salaries were equivalent to hourly wages. {Link without Title} {Link without Title} Meal and Rest Breaks As of the time of submission of Wal-Mart's 10-Q Report for the quarterly period ended October 31, 2005, the company reported: "The Company is a defendant in Savaglio v. Wal-Mart Stores, Inc., a class-action lawsuit in which the plaintiffs allege that they were not provided meal and rest breaks in accordance with California law, and seek monetary damages and injunctive relief. The trial began on September 6, 2005, in the Superior Court of Alameda County, California. The Company believes that it has substantial factual and legal defenses to the allegations at issue." {Link without Title} Child labor violations In January 2004, the New York Times reported on an internal Wal-Mart audit conducted in July 2000 which examined one week's time-clock records for roughly 25,000 employees. According to the New York Times, the audit "pointed to extensive violations of child-labor laws and state regulations requiring time for breaks and meals" including 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times. Wal-Mart’s vice president for communications, Mona Williams, responded that company auditors had determined that the methodology used was flawed. "This audit is so flawed and invalid that we did not respond to it in any way internally." {Link without Title} Today Wal-mart gets a fifteen day's notice before Child Labor inspections. {Link without Title} Arrangement with Department of Labor Under an arrangement, disclosed by the New York Times, Wal-Mart will be allowed 15 days to investigate and rectify employee complaints before the Department of Labor conducts any investigation. Upon receiving a complaint about a potential violation of wage and hour laws, DOL’s field offices around the country are now instructed to notify the DOL office in Little Rock, Arkansas, which will then notify Wal-Mart’s headquarters in Bentonville, Arkansas of the complaint. The Department will not launch its own investigation during that time and it remains unclear under what circumstance it would launch an investigation after the 15 day period ends, Representative George Miller (D-California) requested an investigation by the DOL’s Inspector General to determine whether the arrangement represents a sweetheart deal between the Bush Administration and Wal-Mart. {Link without Title} Critics respond that Wal-Mart’s labor law violations range from illegally firing workers who attempt to organize a union to unlawful surveillance, threats, and intimidation of employees who dare to speak out. Low Wages: The Hidden Price We All Pay for Wal-Mart," A Report by the Democratic Staff of the Committee on Education and the Workforce, 2/16/04 Illegal use of undocumented workers Since 1997 , investigators have found 250 Illegal Immigrants working at Wal-Mart stores. These individuals were employed by custodial services Subcontractors used by Wal-Mart. Many of the janitors worked seven days a week without overtime pay or injury compensation. To settle federal criminal charges relating to these incidents, Wal-Mart paid $11 million in March 2005 without admitting wrongdoing or liability. {Link without Title} There were no charges brought against Wal-Mart or any of its associates. Several of the custodial services firms that employed the illegal immigrants pled guilty to criminal charges. On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states, in a crackdown known as "Operation Rollback". {Link without Title} When they left, the agents had arrested 250 nightshift janitors who were undocumented workers. Following the arrests, a grand jury convened to consider charging Wal-Mart executives with labor racketeering crimes for knowingly allowing undocumented workers to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cheap cleaning services. While Wal-Mart executives have tried to lay the blame squarely with the contractors, federal investigators point to wiretapped conversations showing that executives knew the workers were undocumented. Additionally, some of the janitors have filed a class-action lawsuit against Wal-Mart alleging both racketeering and wage-and-hour violations. According to the janitors, Wal-Mart and its contractors failed to pay them overtime totaling, along with other damages, $200,000. One of the plaintiffs told the New York Times that he worked seven days per week for eight months, earning $325 for 60-hour weeks ($5.41 per hour), and that he never received overtime pay. A legal question now being raised is whether these undocumented workers even have the right to sue their employers. The October 2003 raid was not the first time Wal-Mart was caught using undocumented workers. In 1998 and 2001, federal agents arrested 102 undocumented workers at Wal-Mart stores around the country. {Link without Title} In February 2004 , "the civil rights suit filed against Wal-Mart Stores Inc. by illegal immigrants was expanded Monday to accuse America’s biggest retailer of locking its janitors inside stores during their shifts." {Link without Title} In March 2005 , Wal-Mart settled the lawsuit the government brought against them, for $11 million. "We acknowledge that we should have had better safeguards in place to ensure our contractors were hiring only legal workers," said Mona Williams, a Wal-Mart spokeswoman. "That's why we are agreeing to pay the $11 million." {Link without Title} In November 2005 , 125 alleged illegal immigrants were arrested while working on construction of a new Wal-Mart distribution center in eastern Pennsylvania. According to Wal-Mart, the workers were employees of Wal-Mart's construction subcontractor. {Link without Title} HEALTH INSURANCE Georgia Survey According to a September 2002 survey by the State of Georgia , 10,261 of the 166,000 children enrolled in PeachCare for Kids, the state's health-insurance program for uninsured children, had a parent working for Wal-Mart. For every four of its employees in Georgia, one Wal-Mart child was covered by the program. In contrast, the state's second-biggest employer, Publix , had one child in the program for every 22 employees. {Link without Title} In December 2004 , Wal-Mart commissioned a nationwide survey from Segmentation Co., a division of consulting outfit Yankelovich. The survey showed the use of public-assistance health-care programs by children of Wal-Mart workers was at a similar rate to other retailers' employees, and at rates similar to the U.S. population as a whole. However, Wal-Mart has refused to release its survey, nor will it say which other retailers are included in the report. {Link without Title} Internal Memo On . According to the article, the memo accused Wal-Mart's lower paid employees of abusing emergency room visits, "possibly due to their prior experience with programs such as Medicaid", whereas such visits may actually be due to the reduced ability of uninsured or underinsured people to make timely appointments to see a regular physician. {Link without Title} The memo reportedly also expressed concern that an employee with seniority earns more money, but is not more productive than a new employee. Critics point to the story as evidence that Wal-Mart purports to be generous with its employee benefits, while in reality the company is working to cut such benefits by reducing the number of full-time and long-term employees and discouraging supposedly unhealthy people from working at Wal-Mart. {Link without Title} State Legislature Actions On January 12 the Maryland legislature enacted a law that requires the retail giant to spend at least 8% of their payroll on health benefits - or put the money directly into the state's health program for the poor. {Link without Title} On January 19, "Fair Share Health Care" legislation in Wisconsin was defeated. Wal-Mart spokesperson Nate Hurst stated: "That this bill failed even to make it out of committee in the Wisconsin Assembly is a big setback to the Washington, D.C. union leaders driving these state-by-state attacks against large employers. We're hopeful that more state legislators across America -- like those in Wisconsin -- will come to realize that these bills are harmful to working families. Not only will they do nothing to control the cost of health care or improve access to health coverage, they will cost jobs and hurt economic growth. The American people want their legislators to resist special interest pressure and instead work with colleagues and businesses of all sizes to solve the health care challenges facing America." {Link without Title} OPPOSITION TO UNIONS Meat cutters In 2000, meat cutters in Jacksonville, Texas voted to unionize. Wal-Mart eliminated in-house meat-cutting jobs in favor of prepackaged meats on the claims that it cut cost and was a preventive measure to lawsuits. Wal-Mart also claims this nationwide closing of in-store meat packaging had been planned for many years and was not related to the unionization. In June 2003, a National Labor Relations Board judge ordered Wal-Mart to restore the meat department to its prior structure, complete with meat-cutting, and to recognize and bargain with the union over the effects of any change to case-ready meat sales. Wal-Mart Butchers Force Anti-Union Retailer to Eat Crow , '''', February 24, 2005 Canada The documentary "Wal-Mart the High Cost of Low Prices" shows one successful unionization of Wal-Mart in Canada in 2004. (Jonquière in the province of Québec) but Wal-Mart closed the store within the year claiming the store had become unprofitable. According to Québec law, Wal-Mart must pay all workers the same wage until they are offered similar employment. Wal-Mart stated that it has no intention of re-opening the store, but the labor union and workers argued the store closing was a retaliation against unionization on the grounds that Wal-Mart has not sold the property. In September 2005, the Québec Labour Board ruled that the closing of a Wal-Mart store amounted to a reprisal against unionized workers and has ordered the company to compensate former employees. {Link without Title} Michael J. Fraser, the union's national director said; "Wal-Mart is trying to send a message to the rest of their employees that if they join a union the same thing could happen to them," The union will be filing unfair labor practice charges against Wal-Mart in Quebec. The ''United Food and Commercial Workers Union'' has drives in at least 25 Canadian stores. Workers at the Jonquiere store received union certification in August 2004 and Saint-Hyacinthe, Quebec has the only remaining unionized Wal-Mart in North America. The Quebec Labour Relations Board found the company guilty of harassing and intimidating workers trying to join the United Food and Commercial Workers Union at another store in Ste-Foy, Quebec. {Link without Title} Anti-Union tools In 1970, Sam Walton resisted a unionization push by the Retail Clerks Union in two small Missouri towns by hiring a professional, John Tate, to lecture workers on the negative aspects of unions. On Tate's advice, he also took steps to instruct his workers on how the company had their best interests in mind, encouraging them to air concerns with managers and implementing a profit-sharing program. Shortly after this, Wal-Mart hired a consulting firm, Alpha Associates, to develop a union avoidance program. {Link without Title} The United Food And Commercial Workers (UFCW) asserts that Wal-Mart maintains a phone hotline for managers to call if they suspect union activity. Reclaim Democracy, Internal Documents of Wal-Mart Including "A Manager's Toolbox to Remaining Union-Free", A standard manual for all Wal-Mart managers. Wal-Mart has an anonymous survey given to each one of its employees, called "Grassroots". The UFCW claims that the purpose of this survey is to let Wal-Mart calculate a Union Probability Index number for each facility, that tells them how likely a union is to form there. UFCW representatives also claim that Wal-Mart listens in on store telephone calls and e-mails, looking for signs of unionization. {Link without Title} Wal-Mart also uses this survey to understand associate concerns including pay, relationship with managers, and views on managerial policy and leadership. It was the opinion of the National Labor Relations Board that Wal-Mart had an illegal section of its anti-handbilling/anti-solicitation policy which according to the NLRB stated that Wal-Mart “strives to provide a solicitation-free atmosphere for our customers” and later added "Our Associates are to be focused on being productive and providing excellent service."; which in the opinion of the NLRB was determined to be too broad and intended to keep associates from receiving solicited material while in store and off the clock. In 2003, Wal-Mart amended this policy in an informal settlement with the National Labor Relations Board so that it now disallows any form of solicitation to take place within the store. {Link without Title} In March of 2005, Tom Coughlin was forced to resign from Wal-Mart's board of directors. The company claims that they found evidence of embezzlement by Coughlin. Coughlin claims that the money was used for an anti-union project involving cash bribes paid to employees of the United Food and Commercial Workers union in exchange for a list of names of Wal-Mart employees that had signed union cards. Coughlin also claims the money was unofficially paid to him, by Wal-Mart, as compensation for his anti-union efforts. Coughlin's claims have, according to the New York Times, seemed less credible with his agreement to plead guilty to federal wire fraud and tax evasion. As the Times notes: "...the lack of evidence that he used the missing money to spy on unions raise doubts as to whether such a project even existed." {Link without Title} WORKFORCE DIVERSITY Gender discrimination According to data from the Equal Employment Opportunity Commission , Wal-Mart in 1999 ranked well below its current retailing peers, which have an average of 56% female managers, female employees at Wal-Mart make up 73% of its workforce, but only one-third of its management, a percentage that was typical in 1975. {Link without Title} {Link without Title} Duke v. Wal-Mart Stores, Inc. Wal-Mart is currently facing an $11 billion Gender Discrimination lawsuit, Dukes V. Wal-Mart , representing approximately 1.6 million women. It is the largest class-action suit in American history. According to Wal-Mart's latest Quarterly Filing with the SEC, "The complaint alleges that the Company has engaged in a pattern and practice of discriminating against women in promotions, pay, training and job assignments. The complaint.. includes all women employed at any Wal-Mart domestic retail store at any time since December 26, 1998, who have been or may be subjected to the pay and management track promotions policies and practices challenged by the plaintiffs." {Link without Title} The lawsuit commenced in June 2001 and has been granted Class Action status by the district court hearing the case. In June 2004 , a California judge ruled against Wal-Mart and in favor of the plaintiffs. Wal-Mart appealed the decision and as of November 2005, according to the class action webpage, the case is "currently awaiting the Ninth Circuit's decision on Wal-Mart's appeal of the class certification order. The trial court has stayed (i.e. frozen) the case until the Court of Appeals rules in the class certification order." {Link without Title} Maudlin v. Wal-Mart Stores, Inc. "The Company is a defendant in Mauldin v. Wal-Mart Stores, Inc., a class-action lawsuit that was filed on October 16, 2001, in the United States District Court for the Northern District of Georgia, Atlanta Division. The class was certified on August 23, 2002. On September 30, 2003, the court denied the Company's motion to reconsider that ruling. The class is composed of female Wal-Mart Associates who were participants in the Associates Health and Welfare Plan at any time from March 8, 2001, to the present and who were using prescription contraceptives. The class seeks amendment of the Plan to include coverage for prescription contraceptives, back pay for all members in the form of reimbursement of the cost of prescription contraceptives, pre-judgment interest, and attorneys' fees. The complaint alleges that the Company's Health Plan violates Title VII's prohibition against gender discrimination in that the Health Plan's Reproductive Systems provision does not provide coverage for prescription contraceptives." {Link without Title} EEOC (Janice Smith) v. Wal-Mart Stores, Inc. "The Company is a defendant in a lawsuit that was filed on August 24, 2001, in the United States District Court for the Eastern District of Kentucky. EEOC (Janice Smith) v. Wal-Mart Stores, Inc. is an action brought by the EEOC on behalf of Janice Smith and all other females who made application or transfer requests at the London, Kentucky, Distribution Center from 1995 to the present, and who were not hired or transferred into the warehouse positions for which they applied. The class seeks back pay for those females not selected for hire or transfer during the relevant time period. The class also seeks injunctive and prospective affirmative relief. The complaint alleges that the Company based hiring decisions on gender in violation of Title VII of the 1964 Civil Rights Act as amended. The EEOC can maintain this action as a class without certification. The Company cannot estimate the possible loss or range of loss which may arise from this litigation." {Link without Title} Disability Discrimination In 2001, the EEOC had to file more lawsuits against Wal-Mart for cases of disability discrimination than any other corporation. In July 2001, a top EEOC lawyer told the magazine Business Week , "I have never seen this kind of blatant disregard for the law." Wal-Mart and EEOC settled in December of 2001 with the EEOC's chief negotiator commenting: "Wal-Mart's willingness to enter into this global settlement, which includes significant nationwide training on the ADA and job offers, clearly demonstrates Wal-Mart's commitment to the ADA." [http://www.eeoc.gov/press/12-17-01.html Gay and Lesbian Employees Wal-Mart has received improving scores on the Corporate Equality Index, published by the Human Rights Campaign, a measure of how companies treat gay and lesbian employees and consumers. The company received a 57% rating in the 2005 edition which equaled the rating of several competitors including Costco and Whole Foods. Previously Wal-Mart had received a 43% rating in the 2003 and 2004 editions, and a 14% rating in the 2002 edition. [http://www.hrc.org/cei_press/full_report.pdf Wal-mart's improved score in 2003 accompanied an expanded antidiscrimination policy to protect gay and lesbian employees Walmart's improved score in 2005 accompanied a new definition of family that included same-sex partners. [http://www.hrc.org/Template.cfm?Section=Press_Room&CONTENTID=24994&TEMPLATE=/ContentManagement/ContentDisplay.cfm Wages and benefits from Wal-Mart Wal-Mart has said that it pays all employees above minimum wage, and that wages for each locality are determined by the cost of living, wages of competitors, and supply of labor within the local market. Critics opine that Wal-Mart pays below an average wage of its competitors, but have not presented evidence to prove this. According to a Global Insight study, a "limited analysis...based on a large sample of employee wage data, did not find evidence to conclude that Wal-Mart pays its workers below-market." According to the Cato Institute, a libertarian research organization, Wal-Mart employees receive the fair wage that consumers are willing to pay for that service. [http://www.cato.org/pub_display.php?pub_id=5221 Economist Jerry Hausman argues that Wal-Mart's low prices and savings are more effective at combating poverty than government programs. {Link without Title} Wal-Mart and Healthcare According to Jay Nordlinger and Wal-Mart, more than 80% of Wal-Mart associates have healthcare coverage; and according to Wal-Mart more than 150,000 associates have been given healthcare coverage under the new healthcare plan implemented in 2005. Many critics of Wal-Mart, including those in "Wal-Mart: the High Cost of Low Prices" {Link without Title} argue that employees are paid so little they cannot afford health insurance. According to Jay Nordlinger of the National Review, fifty percent of Wal-Mart employees receive health care coverage through Wal-Mart. This could be in part because Wal-Mart only offers benefits to its part time employees who have been employed there for at least 2 years. Wal-Mart and unions Wal-Mart states that it is not anti-union but "pro-associate", arguing that its employees need not pay third parties to discuss problems with management as the company's open-door policy enables employees to lodge complaints and submit suggestions all the way up the corporate ladder. {Link without Title} {Link without Title} The UFCW has organized pickets outside of Wal-Mart stores in protest of their employee policies. However, some of these picketers have been paid to do so by the UFCW for $6 per hour with no benefits, and almost none of them have been employees of Wal-Mart. At least one paid picketer in a protest in Henderson, Nevada was an ex-employee of Wal-Mart that had little to complain about Wal-Mart, spoke well of the pay he received, and even said he would consider re-applying. {Link without Title} According to Wal-Mart's own training video, Wal-Mart also believes that remaining without unions benefits associates by not only keeping union dues out of associate pay checks but by also maintaining a merit based promotion system that rewards associates for hardwork and innovation rather than a tenure based union system that rewards laborers for how many years they have worked. {Link without Title} Wal-Mart and illegal aliens According to Jay Nordlinger of the National Review , Wal-Mart executives did know that contractors were using illegal aliens as because they had been helping the Federal government with the investigation for the previous three years. Some critics argued that Wal-Mart personally hired illegal aliens, while Wal-Mart claims they were employees of contractors who won bids to work for Wal-Mart. [http://www.walmartfacts.com/newsdesk/article.aspx?id=1012 Workforce diversity In January 2006, the company announced that "diversity efforts include new groups of minority, female and gay employees that have started meeting at Wal-Mart headquarters in Bentonville to advise the company on marketing and internal promotion. There are seven so-called Business Resource Groups: women, African-Americans, Hispanics, Asians, Native Americans, Gays and Lesbians and a disabled group." {Link without Title} Work policies Wal-Marts official work policies stipulate that no associate is to work off the clock for any reason. Wal-Mart associates are also required to take a lunch break after 6 hours of work, and are also not allowed to work more than 6 days in a row. CEO, Lee Scott, admitted that Wal-Mart does employ a few "knuckleheads" who at times may bend or break the rules, and he continued to assert that Wal-Mart "coaches" and terminates those who violate company policy. SEE ALSO REFERENCES |
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