WASHINGTON — Wal-Mart Stores Inc. has acknowledged inadequate internal compliance programs as part of an agreement to pay $11 million to settle federal allegations that it used hundreds of illegal immigrants to clean its stores.
The world’s largest retailer, a target of criticism for its treatment of employees, had been investigated because its janitorial contractors hired the workers in an estimated 1,000 stores. Many of them were said to have worked seven days or nights a week without overtime or compensation for injuries.
In the settlement announced Friday, Wal-Mart was found to not have had procedures to review the work status of contract employees, which could have resulted in criminal charges of violations of U.S. immigration law, a Justice Department spokesman said.
Government attorneys found such action “would not be appropriate,” according to the settlement, which noted that Wal-Mart acknowledged having weak oversight of contract employees and had cooperated in the investigation.
It is illegal under U.S. immigration law for employers to knowingly hire undocumented foreign workers, and it is also against the law for a company to not be diligent in policing contractors for violations, the Justice Department spokesman said.
“A blind eye doesn’t cut it,” the spokesman said.
Wal-Mart general counsel Tom Mars said in a statement: “We are acknowledging that our compliance programs did not include all the procedures necessary to identify independent floor cleaning contractors who did not comply with federal immigration laws. We will use this as an opportunity to improve and be a better, more tightly run business as a result.”
The use of the undocumented workers, mostly from Eastern Europe, came under scrutiny in 2001 as part of an inquiry by U.S. immigration officials into cleaning companies. Sixty Wal-Mart stores in 21 states were raided in October 2003 and 245 foreign nationals without work permits were arrested. A total of 342 illegal immigrants were found to have worked for Wal-Mart contractors.
Authorities said 12 contract companies were hired by Wal-Mart to clean store floors. The companies were either owned or staffed by Christopher Walters, who allegedly recruited the foreign workers, who entered the country on six-month tourist visas, according to the spokesman. As part of the plea agreement, the companies have paid a $4 million fine, entered corporate guilty pleas to criminal immigration charges and agreed to cooperate further in the investigation.