Wal-Mart agrees to pay settlement over hiring of illegal immigrants

LITTLE ROCK, Ark. -- Wal-Mart Stores Inc. escaped criminal charges but agreed Friday to pay a record $11 million to settle federal allegations it used hundreds of illegal immigrants to clean the floors at its stores in 21 states.

A dozen outside contractors that actually hired the laborers for work inside stores for the world's largest retailer agreed to plead guilty to criminal immigration charges and together pay an additional $4 million in fines.

"This case breaks new ground not only because this is a record dollar amount for a civil immigration settlement, but because this settlement requires Wal-Mart to create an internal program to ensure future compliance with immigration laws by Wal-Mart contractors and by Wal-Mart itself," said Michael J. Garcia, assistant secretary for U.S. Immigration and Customs Enforcement.

Federal agents in 2003 raided 60 stores around the country, arresting 245 illegal immigrants, virtually all of them employed by outside contractors.

An employer can face civil and criminal penalties for knowingly hiring illegal immigrants or failing to comply with certain employee record-keeping regulations.

Outside contractors

Wal-Mart, which has 1.2 million domestic employees, had argued in its defense that the illegal immigrants were employed not by Wal-Mart but by outside contractors. But federal prosecutors contended Wal-Mart bore ultimate responsibility.

"We are satisfied that this is being settled as a civil matter," Wal-Mart spokeswoman Mona Williams said from the company's Bentonville headquarters. "Despite a long, thorough and high-profile investigation, the government has not charged anyone at Wal-Mart with wrongdoing."

Wal-Mart said it no longer employs outside contractors to clean its floors. Companies that do contract work for other chores will have stricter rules to follow, and contracts of more than $10,000 will need the approval of upper management, Williams said.

Attorneys for some of the workers claim they worked as many as seven days a week, were not paid overtime and did not receive injury compensation.

About a year before the raids, Wal-Mart had started to bring the cleaning work in-house instead of relying on outside contractors.

The company has 3,703 stores in the United States and had sales last year of $288.19 billion.

Wal-Mart fell 39 cents to $51.94 in afternoon trading Friday on the New York Stock Exchange.