Warehouse workers allege wage theft at Walmart distribution center

It’s called “performance pay scale.” For some logistics company’s it’s a way to motivate and fairly compensate their “associates.” But for some workers at Southern California Walmart distribution centers, it’s a way to cheat them out of wages.

Earlier this week, attorneys on behalf of these workers filed a class action suit in federal court charging the operator of a Walmart distribution center and two of its staffing agencies that use “performance pay scale” to calculate wages with wage theft and abusive working conditions. A spokesman for Walmart said that the mega-retailer is not involved.

Workers named as plaintiffs in the suit have been assisted by Warehouse Workers United, which has been organizing warehouse workers in the region of Southern California known as the Inland Empire.

“We are here to expose the dirty little secrets taking place inside of these buildings by large corporations like Walmart, Schneider and the staffing agencies that abuse these workers day in and day out,” said Guadalupe Palma of Warehouse Workers United at a rally to support the plaintiffs. “Unfortunately we know that these types of conditions are not uncommon in the warehouse industry.”

The suit seeks to recover back wages, overtime compensation, and payments missed for meal breaks for a period that began in 2009. The suit seeks $10 million in compensation for unpaid wages and other abuses from Schneider Logistics of Green Bay Wisconsin, Impact Logistics of Memphis, and Premier Warehousing Ventures of Rocky Mountain, North Carolina.

“Performance pay scale” is another term for piece-rate pay, a form of compensation common in sweatshops that pay workers for the number of pieces produced rather than for time worked. Premier and Insight workers are paid for the number of boxes they unload from cargo containers.

The workers’ suit alleges that their piece rate does not fairly compensate them for overtime worked. “There have been times when we’ve worked up to 16 hours a day and we don’t even earn a minimum wage,” said Juan Chavez, one of the plaintiffs in Spanish. “We don’t know how that amount has been arrived at to tally our wages.”

The suit also says that “defendants did not, and do not, pay those workers for work they perform on any container that is not completely unloaded by the end of the work shift.”

Furthermore, there is no compensation for incidental assignments such as sweeping, breaking down pallets, locating missing boxes, and breaking down pallets.

Workers complain that there is not enough information on their pay stubs to determine how their wages were calculated and that it is  left up to crew chiefs to determine how many hours they worked with no independent way, such as a time clock, to verify the hours submitted.

The suit comes on the heels of a recent investigation by the California Department for Industrial Relations, which found that Impact Logistics did not provide itemized wage statements that would allow workers to determine whether their wages were calculated correctly. The company was fined $499,000 and was issued a notice to discontinue labor law violations. Premier was also issued a notice to discontinue labor violations.

“Warehouse workers do some of the most backbreaking jobs in our economy,” said California Labor Commissioner Julie A. Su, commenting on the investigation and the subsequent fine. “Their work is often hidden from public view and there is constant pressure to work faster, which can lead to abuse. In this case, workers were paid piece rate to unload containers. Piece rate workers must receive at least minimum wage and overtime for all hours worked.”

Su also said that an investigation is ongoing to assess all wages owed to workers.

The suit alleges other abuses. “There are a large amount of abuses against workers there,” said plaintiff Everardo Carrillo, speaking through a Spanish interpreter. “I once worked from 7 am to 2 am the next day. We unloaded containers when conditions were very bad, 110 degrees inside. The pay arrangement was very unorganized. If you asked questions, you could be laid off for two or three days or a week.”


One thought on “Warehouse workers allege wage theft at Walmart distribution center

  1. This method of abuse and wage theft is nothing new. In San Antonio Labatt Food distributors use a similar plan that results in high worker turn over.

    Unfortunately our labor laws lack teeth and until the working class finally accepts the fact that neither of the two major parties truly represents our interests, labor laws will remain weak.

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