Wage Theft at Wal-Mart Warehouses? Fourth Lawsuit in Two Years Filed on Behalf of Underpaid Workers

The following article first appeared at Working In These Times, the labor blog of In These Times magazine. For more news and analysis like this, sign up to receive In These Timesweekly updates.

With Black Friday sales beginning Thanksgiving at 10 p.m., Walmart expects to bring in many millions in salesthis week on the single most important shopping day of the year. 

Meanwhile workers in Walmart’s warehouses in Chicago and southern California charge that the logistics companies contracted by the mega-retailer are nickel-and-diming them, shaving dollars off their hourly wages as temporary workers and obscuring the practice by failing to give them accurate pay stubs.

On November 19 the group Warehouse Workers for Justice helped workers file their fourth class action lawsuit since 2009 against companies that operate Walmart warehouses in the Chicago area.

This lawsuit charges that at least 18 workers at a warehouse in suburban Elwood realized once they were paid that they got less than promised and in fact less than minimum wage from the company Eclipse Advantage. This week workers marched to Eclipse offices demanding its billing and payment records so they can figure out exactly how much they are owed.

Shoddy record-keeping and incomplete or non-existent paystubs are a common complaint in the industry, where workers are often not even sure what company exactly they are working for and what their official pay rate is. The lawsuit also names Mid-West Temp Group Inc. Some workers were hired by Mid-West to work for Eclipse, others were hired directly by Eclipse. Multiple levels of subcontractors are another common facet of the warehousing industry.

The lawsuit complaint notes that workers were promised $9.25 to $10 an hour plus a productivity bonus, but realized once they got checks that they were paid for substantially fewer hours than they had actually worked, bringing their de facto hourly wage way down. The suit charges they were also promised paid vacation -- a recruitment tactic during the busy holiday season – but were never granted paid leave.

The lawsuit charges the companies violated state and federal labor law and the Illinois Day and Temporary Labor Services Act, one of the strongest such state laws in the country. Among other things the complaint charges that workers were hired and paid for less than four hours at a stretch – the state temporary labor law mandates workers must receive payment for shifts of at least four hours at a time.

The complaint states:

Defendants failed to pay Plaintiffs and other laborers a minimum of four hours “show up pay” on days when they were contracted to work but not utilized for a minimum of four hours and failed to pay Plaintiffs and other laborers vacation pay that they had earned and accrued pursuant to Illinois law and Defendants had promised them to induce them to work for Defendants instead of working for other staffing agencies.

In a press release worker Roberto Gutierrez said:

I worked twenty-one hours for Eclipse my first week and I was paid fifty-seven dollars for it… The company says I only worked twelve hours, but even by their logic I was still paid less than minimum wage. That’s never right, especially so close to the holidays, that’s why we came together and filed this, to put a stop to it.

None of the lawsuits name Walmart directly as a plaintiff, but through public relations campaigns the group and their supporters are trying to drive home the message that Walmart is ultimately responsible for the wages and working conditions in the warehouses where goods for their stores are received, stored and distributed. Such warehouses are an essential part of the modern big box store operation, where goods are constantly restocked based on computerized systems indicating exactly when products are sold.

Last month the California labor department fined an operator of Walmart warehouses half a million dollars for labor law violations, and California workers filed a class action lawsuit against that company – Impact Logistics – and other logistics companies. 

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