Mexico Supreme Court to Wal-Mart: You can't pay workers with gift cards

Posted Sep 6th 2008 3:10PM by Zac BissonnetteZac Bissonnette RSS Feed
Filed under: Law, Wal-Mart (WMT), Employees

Mexico's Supreme Court has ruled that Wal-Mart de Mexico, also known as Walmex, violated the country's constitution by paying workers, in part, in vouchers only redeemable at the store. Walmex is a wholly-owned subsidiary of Wal-Mart Stores Inc. (NYSE: WMT).

That's right: Wal-Mart was trying to pay its workers with gift cards. That sounds bad but it's really not quite as messed up as it seems. The Wall Street Journal reports (subscription required) that "the retailer said the program was voluntary, and designed to help our employees acquire basic necessities." It went on to explain in the statement that under the program, "Walmex would put store credit on electronic cards and the employees could contribute a matching amount."

Here's what I don't understand: if the company wants to offer employees the option of being paid with store credit -- and employees want to take advantage of the offer -- whose rights are being violated?

The reality is that Wal-Mart offers compelling values on household items and, for many low-income workers, the chance to receive a portion of earnings in store credit would be a good opportunity. If it isn't, they don't have to take it!

I'm not sure why the courts needed to get involved here.

Obviously someone complained ... and it may just be the way its set up initially. It may be voluntary, but what if its automatic until you realize what's going on when you get your first paycheck ... in the form of a gift card!

"Hey! I have a drug cartel to pay off so they don't wreck my home! Gimme my money!"

"Sorry, you 'agreed' to this compensation. Would you like to change it for your next paycheck?"

Heh ... but yeah, more information required.

Mexico is bass-ackwards.
If, they ruled against it, it must have been a good deal for the workers.

Wow, that's actually a really good deal. If you look into the program, the way it worked was that Walmex would give the employees store credit, just so long as the employees would match it in cash from their paycheck. It's actually really generous of them to make the offer. Company matching on Walmart gift cards? How is that a bad thing? Especially when it wasn't their whole paycheck, just a portion. Put $50 bucks in and you can spend $100 at Walmart. I can't honestly see how anyone could complain about this arrangement from what little I know of it. And the program was voluntary! I honestly don't understand the objections to this.

if it is a great deal, why didn't they try it over here? because it is very illegal over here..

No, I would be illegal to force employees to accept Walmart gift cards instead of money, this program is completely different.

1) Nobody is forced to enter the program, it completely voluntary.
2) It's not your whole check, just a portion.
3) It doubles any income that you put into your walmart gift card.

That's not the "company store" situation. This is actually giving yourself a raise, just so long as you already shop at Walmart.

The only objection I could see is if the amount you had to match was very high. I haven't found any information of the total amount and that would be nice to know.

Was this happening to employees who didn't want to be paid in store credit? Sounds kind of weird.

According to the report, no. The program was voluntary.

I have to agree with donthatoneguy. Someone must have complained. And I doubt we're getting all the information about what happened.

When i worked at Lane Bryant they forced me into opening a credit card in their company and i was only allowed to wear clothes from their store to work which had to be purchased only on their credit card. Or else I didnt get the job. I said, what if i dont want your credit card, they said then you dont get the job.

I don't know about the credit card thing, but I do know there are a lot of jobs out there where they require you to buy their clothing to wear at work.

..well ya know what they say.."there' no news like ..NO NEWS..or was that good news...never mind..

Yeah, the complaint was that they couldn't use the card everywhere. The judge ruled that if Walmex wanted to continue, they had to put the money on a debit card that could be used anywhere. So the voluntary program was shut down and those who wanted to take advantage of it, were just SOL.

here is a slightly different story...

http://www.reuters.com/article/2008/09/05/mexico-walmex-idUSN0546591320080905

Sounds like the employee(s) didn't understand exactly how they were getting paid.

That story makes it sound like it wasn't voluntary.

Why didn't Walmart just tell their employees that they could just shop at Walmart at greatly reduced prices like other stores? This sounds like an old fashioned company store to me.

lol, i read about 4 different stories on this, and they were all different... go figure

i agree, if was as simple as walmart says it is, the government wouldn't have gotten involved...

Where'd you get the first story you posted?