Smart Growth for Vernon, CT
Labor Department slaps fine on CVS

By Howard French
Journal Inquirer
December 11, 2007

The U.S. Labor Department has hit Rhode Island-based CVS Pharmacy Inc. with penalties totaling more than a quarter-million dollars for violating wage and child labor laws at stores around the Northeast, including an Enfield store, the department announced Monday.

The stores targeted included four in Connecticut, among them the CVS at 47 Hazard Ave. in Enfield. The three other Connecticut stores included in the Labor Department action were in Ansonia, Bridgeport, and New Britain, according to Labor Department spokesman John M. Chavez.

CVS, based in Woonsocket, R.I., has agreed to pay the Labor Department $226,598 in civil penalties and to pay 51 employees back wages totaling $38,151, according to a statement from Corlis Sellers, the Northeast regional administrator for the Labor Department's wage and hour division. The penalties were levied "following an investigation by the department that revealed violations of the wage and youth employment provisions of the federal Fair Labor Standards Act," Sellers said.

"Previous investigations by the department's wage and hour division had disclosed violations at some of the company's retail pharmacies," Sellers said.

As a result, the division "took a more comprehensive look at CVS locations throughout the Northeast this year," he said.

A total of 63 CVS stores, located in Connecticut, Rhode Island, Massachusetts, New Hampshire, New York, New Jersey, Maryland, Pennsylvania, and Virginia, were checked for compliance with the Fair Labor Standards Act, Sellers said.

"The law requires that covered workers be paid at least the federal minimum wage and one and one-half times their regular rates of pay for all hours worked over 40 in a single work week," he said.

"The law also requires employers to maintain adequate and accurate records of employees' wages, hours, and other conditions of employment," Sellers said, adding it also "strictly regulates the employment of young workers."

The federal minimum wage is $5.84 per hour. Connecticut's state-mandated minimum wage is $7.65 per hour. Among the findings of the U.S. Labor Department investigation, according to Sellers, were that 78 minors were found to have been exposed "to the hazards of loading-unloading-operation of cardboard compactors-balers at various CVS locations." In addition, "seven minors were found to have been employed in violation of the law's time standards," he said, "and 51 employees were found to be due a total of $38,151 in back wages, mostly because of the improper editing of their timecards by store managers."

Of 63 stores investigated, 43 had wage and-or youth employment violations, Sellers said. For the youth employment violations, the wage and hour division has assessed CVS a total of $215,378 and, for the wage violations, a total of $11,220 in civil penalties, he said.

"As a result of this investigation, CVS Pharmacy Inc. has agreed to pay the back wages and penalties, and to make efforts to achieve full compliance with the FLSA at its more than 6,000 stores nationwide," Sellers added.

In a company statement today, CVS spokesman Michael J. DeAngelis said that teenage employees "were found to be operating certain equipment against established company policy." Specifically, the employees were found to have loaded, unloaded, or operated a paper baler "in violation of company policy and without permission to do so," DeAngelis said. "None of the employees was injured during the course of these unapproved activities," he said.

In addition, the settlement agreement includes "implementation of manager training during manager orientation; training of minors in regard to these work limitations, and provision of information to parents of minors upon hire," DeAngelis said. CVS also will be "posting stickers, restricting keys, and prohibiting minors from entering areas that have restricted equipment," he said. Although CVS disputes the findings of the investigations concerning payment of wages, "the decision was made to pay 51 employees back wages that in most instances ranged from $39 to $300," DeAngelis said.

"CVS has a policy of paying for all time worked, including payment in accordance with federal requirements for time worked over 40 hours in a single work week and takes timely action to correct any errors," he said. "The company also provides a mechanism for employees to timely report any payroll concerns or questions," DeAngelis said.

CVS stock ended the trading day Monday at $40.01 per share, down 3 cents per share. Over the past year the stock has traded between a low of $29.44 per share and a high of $42.60 per share.