Is a company liable for how workers are treated by its contractors? A federal judge in Los Angeles believes so.
Schneider Logistics used about 1,800 employees hired through two temporary staffing agencies. These “permatemp” employees were treated as temporary workers but held their jobs for long periods. While the “permatemp” workers did the work of full-time employees, they were not given the same pay or benefits.
The workers are now suing Schneider, Walmart, and the two temporary staffing agencies. They are accusing the companies of violating fair labor laws by failing to pay minimum wage, failing to pay overtime, and providing substandard working conditions.
A similar lawsuit was filed in October in Illinois.
This is the first time a company has been held responsible for how a contractor treats its employees. But, this is not the first time that Walmart has been accused of unfair labor practices. In May 2012, Walmart was ordered to pay $4.83 million in back wages and damages to 4,500 employees who were denied overtime pay. Most of the employees were vision center managers and security supervisors.
Walmart says that it is investigating the warehouse workers’ allegations and is planning an audit of all its third-party contractors to ensure proper work conditions.