We want to "set the record straight," Scott told reporters in New York. Advertisements claim that Wal-Mart pays twice the minimum wage and that three quarters of all hourly employees are full-time, and that Wal-Mart offers health and life insurance. Although Scott did not say which level of employee qualifies for benefits, nor how many employees receive the benefits listed.
Scott praised Wal-Mart's record number of new store openings in 2004 and he says a record number of stores will open in 2005. Wal-Mart's CEO likens criticism to "being nibbled to death by guppies," but he does not dismiss concerns from communities targeted for new stores.
It pays to please Wal-Mart. The US-retail giant received a gift from President George W Bush's administration in 2004, in the midst of battling labor lawsuits for unpaid overtime.
Contribution update 2004:|
Wal-Mart donations for the 2004 election stand at $3,094,478 with $2,568,416 earmarked for Republican candidates. Wal-Mart remains the top retail industry campaign contributor.
Wal-Mart, the largest company in the United States, employs 1.4 million and earns $245 billion. Under new overtime laws launched in August 2004 by the U.S. Labor Department, the cut-price retail chain stands to save millions from reduced overtime payouts and relieve itself of future overtime law liability suits. At least, that is what Wal-Mart hopes.
Wal-Mart will join millions of businesses trying to understand the new Labor Department overtime laws. Estimates of which employees will lose overtime range from a mere 100,000 up to 6 million, and those who will earn overtime could be as many as 1 million. The Labor Department does not know, but did launch its first overhaul of overtime laws in recent memory in order to simplify employer costs.
Upper management, white-collar jobs earning less than $23,660 will become eligible for overtime. These rules won't help Wal-Mart managers however, since manager salaries exceed the minimum. Managers at Wal-Mart earn an average of $105,000 -- disqualified for overtime -- associates earn an average of $17,000, but most associates do not work full-time, and therefore don't qualify.
With election 2004 approaching, Wal-Mart funnelled $1,049,850 in political contributions through political action committees (PACs) so far this cycle. (Wal-Mart donated $1,690,123 million in political contributions during cycle 2002.) Wal-Mart remains the top retail industry political campaign donor, $882,000 ahead of No. 2, the National Association of Convenience Stores.
The new overtime laws drop workers from overtime eligibility by reclassifying them as "professionals," or administrators, and "training" joins university degrees as a qualifier for professional classification.
Wal-Mart setup shop at 4,300 locations worldwide.
While both republicans and democrats alike remain cool to the overtime laws, the Labor Department regulated the "administrative rule change," after eight months of planning.
In advance of the new order, the Labor Department guided employers how to legally avoid overtime pay to low-income workers who otherwise might be eligible for extra cash. New labor advice does not address disparity between equal gender pay (a second issue facing Wal-Mart in court,) nor does it recommend a raise in the minimum wage, but instead releases employers from paying overtime to anyone earning more than $22,100. In other words, the Labor Department expected that as many as 1.5 million workers earning less than the new cap, would either be eligible for overtime or a pay increase.
During 2003, the Labor Department recovered $212 million in unpaid overtime wages from claims filed by employees -- the largest case involves Wal-Mart, after workers say they were forced to work more than 40 hours per week without pay. The Labor Department says fewer lawsuits (as a result of the new rules) should save $1.9 billion for employers. With new administrative laws, the Labor Department relieves itself of handling claims and places future disputes in the hands of employers.
Wal-Mart does not release the ratio of part-time to full-time workers. Part-time workers are eligible to join medical benefits after two years, while full-time employees may join after six months. Wal-Mart's turnover rate only recently fell to 45 percent (down from 65 percent in 1999,) thus Wal-Mart employees are less often taking coverage, saving the corporation additional expense.
If you plan to work at Wal-Mart, the company states that it pays competitive salaries for the industry, and is proud of stablizing "turnover" during the past three years. The retail chain, which also owns Sam's Clubs, says it is proud of meeting the industry average turnover rate. Vice-Chairman Thomas Coughlin says, Wal-Mart plans to add 800,000 new "warm bodies" to the payroll through year 2008, including 47,000 management positions at the standard rate of pay. The Bureau of National Affairs reports a turnover rate of 14.4 percent annually in the United States.
The Labor Department urges employers to keep employees on a 40-hour week (or less) schedule, which in itself relieves Wal-Mart and others of any future employee lawsuits.
Forbes magazine ranked Wal-Mart one of the best 100 companies to work for -- if you are an executive -- employees were not interviewed for the magazine. Wal-Mart accounts for 2.5 percent of the United States' Gross National Product. When Wal-Mart opens a new retail store, economic impact reports show the super chain absorbs between $35 million and $71 million in sales away from area stores.