Ethics of Wal-Mart
...neider, 2003). This isn’t the first time Wal-Mart has had trouble with undocumented workers. In 1998 and 2001 federal agents arrested 102 undocumented workers at Wal-Mart stores around the country. In addition, some of the janitors, from the 2003 raids, filed a class-action lawsuit for $200,000 alleging that Wal-Mart and its contractors failed to pay them earned overtime (Greenhouse, 2003). Not only has Wal-Mart had issues with not paying overtime to undocumented workers, but they have also been accused of making associates work off-the-clock. The Fair Labor Standards Act (FLSA) along with state wage and hour laws requires hourly associates to get paid for all time actually worked at no less than minimum wage. It also states that for all hours worked over 40 employees are to get time-and-a-half (Office of Personnel Management, 2003). There are over 39 class action lawsuits against Wal-Mart in 30 states. They are claiming tens of millions of dollars of back pay for tens of thousands of Wal-Mart’s employees (Associated Press, 2003). In 2001, Wal-Mart dished out over $50 million in unpaid wages to 69,000 workers in Colorado, after making them work off-the-clock. These wages were only paid after the workers filed a class action law suit. The company also paid $500,000 to 120 workers who filed suit for unpaid wages in Gallop, New Mexico (Lieff Cabraser Heimann & Bernstein, LLP, 2001). The 2002 year didn’t bring any better news for Wal-Mart. Current and former Wal-Mart employees filed a class action lawsuit in Texas. It was estimated that the company shortchanged its 200,000 workers $150 million dollars over four years. This was just based solely on the employees working through their daily 15 minute breaks (Greenhouse, 2002). Later that year, 400 employees in 27 stores sued the company for off-the-clock overtime that was unpaid, in Oregon. In their suit, the employees claimed that managers would delete hours from their time records and tell associates to clean the store after they had clocked out. In fact, one personnel manager stated that she was forced to delete hours from time sheets, for six years. In December 2002, a jury found in favor of the workers (Foden-Vencil, 2004). The latest class-action filed in this matter was certified for over 65,000 Wal-Mart employees in Minnesota (Freed, 2003). The FLSA (2003) and state wage and hour laws also oversee child labor and work breaks. These work regulations have also created a problem at Wal-Mart stores. In January 2004, it was reported by the New York Times that an internal Wal-Mart audit found “extensive violations of child-labor laws and state regulations requiring time for breaks and meals.” In July 2000, one week of time records from 25,000 employees found 1,371 instances of minors working too late, during school hours, or for too many hours a day. There were also 60,767 missed breaks and 15,705 lost meals. A store manager from Kentucky told the New York Times that after the audit was issued, they received no word by company executives about the need to cut down on these violations (Greenhouse, 2004). In addition to treating their own employees badly, by making them work off of the clock, Wal-Mart has also been under a lot of scrutiny for their low wages and lack or inability to get benefits. Wal-Mart’s wages are even considered low by general industry standards. For example, in 2001, an average supermarket employee made $10.35 per hour (Williams, 2003). Wal-Mart’s sales clerks, on the other hand, made a mere $8.23 per hour on average. This amounts to only $13,861 per year. This fell below the 2001 poverty line of $14, 630 for a family of three (Dority, 2003). Although things have changed slightly since 2001, it is estimated that the average salaries range from $7.50 to $8.50 per hour. With an on-the-clock average work week of 32 hours, many associates take home less than $1,000 per month (AFL-CIO, 2004). Wal-Mart profits more than enough money to pay their associates better. In 2002, for example, Wal-Mart’s profits hit $6.6 billion (Olsson, 2003). Unfortunately, Wal-Mart’s workers are not sharing in much of their success. Most Americans receive their health insurance from their employers. At the same time, most of the uninsured are low to moderate income working Americans, whose employers either do not offer insurance or the insurance offered is unaffordable (Kaiser Family Foundation, 2003). Many Wal-Mart employees fall into this category. Fewer than half of Wal-Mart’s associates are insured by the company offered insurance plan. In 2002, Wal-Mart increased the waiting period for enrollment eligibility from 90 days to 6 months for full-time employees. Part-time employees, on the other hand, must wait two years before enrolling. They also may not purchase coverage for their spouses or children. To make matters worse, Wal-Mart changed their definition of part-time from 28 hours or less to 34 hours or less per week. This offers even fewer employees and their families insurance (AFL-CIO, 2003). Those who do manage to get insurance from Wal-Mart, are stuck with much of the health care costs. In 2001, their employees had to pay 42 percent of their health care costs (AFL-CIO, 2003). Additionally, Wal-Mart employees that make use of their health care face high deductibles and co-payments. A single worker could end up spending 45 percent of his or her annual salary before seeing a single benefit from the health plan. In the end, many Wal-Mart workers must turn to public assisted health care or forego health care all together (Holahan, 2003). I chose to write this report on Wal-Mart for a few different reasons. The most important reason was because I work there. I worked there for three years before leaving for three years and returning again. I have worked there about a year since returning. I notice things within my own store that are unethical. I find Wal-Mart’s denial of any allegations to be very comical, considering they care more about making money than they do their employees. They would love the public to believe otherwise, however. I think that anytime there is a corporation as large as Wal-Mart, it is hard to keep everyone acting appropriately at all times. I do think, however, that if they followed Sam Walton’s ideals of respecting customers, as well as employees, that a lot of their issues would be non-existent. They have become so power-hungry and greedy that they now feed off of their own associates to get what they want. In conclusion, Wal-Mart has done many questionable things, especially within the past five years, to get ahead. This has come at the expense of many people, ranging from minorities who want a job to employees who jus...