Wal-Mart Stores Inc. Could Owe $100M For Minimum Wage Violations

Walmart’s payment policies for truck drivers violated California minimum wage law, a federal judge ruled. The lawyers who brought the class-action suit say the retail giant could now owe more than $100 million in back pay. While Walmart opposes the ruling, the company did not say whether it plans to file an appeal.

Truckers sued Walmart in 2008, arguing the company failed to adequately compensate them for non-driving tasks such as inspections, rest breaks, fueling and washing trucks, waiting at weigh scales and taking mandatory “layover” periods intended to reduce fatigue. Walmart doesn’t pay drivers by the hour. They pay by miles driven and activities performed -- for example, the delivery of a trailer loaded with cargo.

In her May 28 ruling, U.S. District Judge Susan Illston said the pay manuals failed to comply with the state’s minimum wage law. “Here, certain required tasks are specifically designated as unpaid activities,” Illston wrote. “The court finds that the pay policies detailed in the manuals violate California minimum wage law by failing to pay drivers at least minimum wage for all the time they work.”

The manuals in the lawsuit date from 2001, 2006 and 2008. When asked if the ruling would impact Walmart’s current driver pay manual, company spokesman Randy Hargrove said “it would not be appropriate get into that level of detail” because the topic is a matter of ongoing litigation.

With 1.4 million workers, Walmart is the nation’s largest private-sector employer. Compared to the rest of its workforce, many of whom make just over state and federal minimum wages, truck drivers are paid handsomely. The company says drivers make, on average, $80,000 to $100,000 per year, and job survey site Glassdoor puts the annual compensation figure around $84,000.

Labor advocates tend to talk about “wage theft” -- a situation in which an employer illegally withholds compensation -- in the context of low-paid workers, such as janitors who are deprived of overtime or fast-food workers not being paid during breaks. These practices tallied up to nearly $1 billion in 2012, according to the left-leaning Economic Policy Institute. The Walmart lawsuit is unusual because it frames generally well-compensated employees as victims of the trend. It also sheds light on the labor practices of the trucking industry.

In a separate labor dispute, truck drivers at major ports in Southern California have accused companies of incorrectly categorizing them as independent contractors instead of employees. Truckers have organized several walkouts there since 2013 as they try to organize a union.

A jury in the Walmart case will weigh in next April to determine damages.