(Reuters) – Wal-Mart Stores Inc has in recent months been only hiring temporary workers at many of its U.S. stores, the first time the world’s largest retailer has done so outside of the holiday shopping season.

A Reuters survey of 52 stores run by the largest U.S. private employer in the past month, including one in every U.S. state, showed that 27 were hiring only temps, 20 were hiring a combination of regular full, part-time and temp jobs, and five were not hiring at all. The survey was based on interviews with managers, sales staff and human resource department employees at the stores.

The new hiring policy is to ensure “we are staffed appropriately,” when the stores are busiest and is not a cost-cutting move, said company spokesman David Tovar. Temporary workers, he said, are paid the same starting pay as other workers.

Using temporary workers enables the company to have adequate staff on busy weeknights and weekends without having to hire additional full-time staff.

Tovar said fewer than 10 percent of its U.S. workforce is temporary – or what the company internally calls “flexible associates” – compared to 1 to 2 percent before 2013. The majority of its workforce is still regular full-time staff, he said.

Walmart U.S. Chief Executive Bill Simon also confirmed that the company is hiring more temp workers. “Their hours flex by the needs of the business from time to time,” he told reporters the day before Wal-Mart’s annual meeting last week.

The hiring strategy could save Wal-Mart money by trimming labor costs at a time when its margins remain under pressure. Many consumers are still struggling given a high jobless rate and lack of income growth, leaving retailers of everyday goods with little pricing power, according to other company CEOs and benefits experts. Competition from dollar stores, other big box discount chains and grocery stores is also intense.

It also could set an example for some other companies as they look for ways to cushion themselves from a potential rise in healthcare costs next year as a result of President Barack Obama’s health care reforms, according industry experts and retail executives. Tovar said that the move wasn’t related to these reforms, commonly known as Obamacare, but he did acknowledge that it could take a year or more for temporary workers to receive health care benefits. Turnover in retail often occurs within the first few months.

FEWER FULL-TIMERS

Wal-Mart’s U.S. staffing has remained relatively flat even as more stores have opened in recent years. At the end of fiscal 2013, Wal-Mart had “more than 1.3 million” workers in the United States, the majority of them at 4,005 Walmart U.S. stores, compared with “approximately 1.4 million” workers in the United States at the end of fiscal 2009, the majority of them at 3,656 Walmart U.S. stores, according to the company’s annual filings for both years.

The temporary workers are often being hired on 180-day contracts, according to the survey of Wal-Mart stores. The temps could eventually be hired for a regular full or part-time job or they could reapply for their temporary position, the Wal-Mart staff said.

Temp workers typically have a completion date after which they have to reapply for work, but part-time employees work fewer hours than full-time workers indefinitely.

“Full-time people are getting slimmer and slimmer,” said a supervisor at a store in North Carolina, who asked not to be named, as did other store-level employees who were interviewed for this story, because she is not authorized to talk to the media.

She said that the five new employees hired this year at the store are all temps and hours of existing employees are being cut.

“Everybody who comes through the door I hire as a temporary associate,” said a store manager in Alaska, who asked not to be identified. “It’s a company direction at the present time.”

“Long-term associates are particularly distraught by this short-term hiring as many are looking for more hours and full-time work,” said Mary Pat Tifft, a member of the Organization United for Respect at Walmart, or OUR Walmart, a group of current and former Walmart employees campaigning for better wages, hours and benefits. It does not define itself as a union, although its members do pay $5 monthly dues. OUR Walmart is part of the United Food and Commercial Workers International Union.

WEAK LABOR MARKET

The move to hire more temps throughout the year has not caught on with Wal-Mart’s rivals such as Target, Costco and Sears, all of which said they are hiring full time and part-time employees but don’t plan to hire temps outside of seasonally busy periods like the holidays.

“I don’t know about others’ practices or philosophies, but I can say that Costco’s general hope and expectation when hiring an employee is to make it a long-term relationship,” said Patrick Callans, vice president for human resources and risk management at Costco.

Only discount chain Dollar General Corp told Reuters it does hire temp workers year-round but declined to comment on the reasons.

Labor market experts said that the relatively high U.S. unemployment rate, which was 7.6 percent in May, and the large number of people not counted because they have left the labor force at least temporarily, does give companies like Wal-Mart the conditions to attract temp workers. That may be less the case if the economy continues to improve and the jobless rate falls.

Hiring temps is “one strategy” that retailers could use to mitigate the potential rise in healthcare costs due to the new healthcare care law, said Neil Trautwein, a healthcare lobbyist for the National Retail Federation. “Another strategy could be employing more part-time employees.”

Wal-Mart already has begun to change the healthcare plans it provides workers. Last November, it said that newly hired part-time employees would have to work a minimum of 30 hours a week, up from 24 hours previously, before they can qualify for health coverage.

Its U.S. employees also faced an 8-36 percent increase in premiums in 2013, the company said at the time, prompting some workers to forego insurance. The majority of eligible employees at Wal-Mart sign up for the company’s health insurance.

Under the reforms, large companies must next year offer healthcare to 95 percent of employees who work more than 30 hours a week or pay a penalty of $2,000 per worker for the entire workforce.

When the work hours are so variable that the employer is not certain whether an employee qualifies, they can elect to determine eligibility by measuring hours during a period of up to 12 months, a strategy Wal-Mart said it plans to use.

Temp workers may therefore have to wait a year – provided they are still employed at the company – to find out if they are eligible.

“A temporary worker may never get that far,” said Barbara McGeoch, a principal and health benefits expert at consulting firm Mercer’s legal, regulatory and legislative group. “They may never get the coverage.”

(Reporting by Dhanya Skariachan in New York and Jessica Wohl in Chicago; Additional reporting in New York by Caroline Humer; Editing by Jilian Mincer, Martin Howell and Tim Dobbyn)

The U.S. Drug Enforcement Administration on Tuesday said the
settlement is the largest in its history.

It accused Walgreen of committing an “unprecedented” number
of record-keeping and dispensing violations of the Controlled
Substances Act.

The DEA said these violations allowed drugs such as
oxycodone, a narcotic, to be distributed to abusers and sold
illegally on the black market.

“National pharmaceutical chains are not exempt from
following the law,” Mark Trouville, special agent in charge in
the DEA’s Miami field division, said in a statement. “All DEA
registrants will be held accountable when they violate the law
and threaten public health and safety.”

Walgreen was not immediately available for comment.

As part of the settlement, Walgreen admitted that it failed
to uphold its obligations as a DEA registrant.

Six Walgreen pharmacies in Florida and a distribution center
in Jupiter, Florida were given a two-year ban from dispensing
various controlled substances.

The Deerfield, Illinois-based company also agreed to enhance
training and compliance programs, and set up a Department of
Pharmaceutical Integrity to help prevent similar violations.

Florida, where the probe was centered, has long been
considered a center of prescription drug abuse, and the DEA has
dismantled dozens of sham clinics, known as “pill mills,” where
doctors have written prescriptions for drug dealers and addicts.

In afternoon trading, Walgreen shares were up 4 cents at
$49.69 on the New York Stock Exchange.

The event at the Bud Walton arena in Fayetteville,
Arkansas, is traditionally more of a pep rally for thousands of
employees than a typical annual meeting. Shareholders attend,
including members of the Walton family, who collectively own
just over half of Wal-Mart’s shares. But the largest and loudest
contingent is 14,000 workers from around the world, including
store workers and truck drivers.

Wal-Mart continues to face pressure from some shareholders
over issues including the alleged bribery of officials in Mexico
and a supposed cover-up reported by the New York Times in 2012,
as well as factory safety after industry building catastrophes
in Bangladesh. Executives emphasized integrity
in their speeches on Friday, echoing comments made at last
year’s event.

“You operate with integrity, our company was founded on
integrity,” Chief Executive Mike Duke told the crowd. “For
Wal-Mart, compliance is an absolute. Make no mistake about it,
we will do the right thing.”

This year there were protests by OUR Walmart, a union-backed
group that hopes to gain the attention of the Walton family and
other shareholders. OUR Walmart wants Wal-Mart to publicly
commit to providing full-time work with a minimum wage of
$25,000 a year.

Despite the protests, Wal-Mart has continued to increase
sales and profit, and its shares have risen.

Still, a 15.4 percent gain in Wal-Mart shares since last
year’s annual meeting was smaller than a 24.1 percent gain in
the Dow Jones Industrial Average, of which Wal-Mart is a
component.

As of Thursday, Wal-Mart had about $712 million remaining
under a $15 billion share repurchase program announced in June
2011.

Shares of Wal-Mart were up 1.2 percent at $76.55 on Friday
afternoon on the New York Stock Exchange.

WAGE DISPUTE

Thousands of associates, as Wal-Mart calls its workers, were
picked by their peers and managers to attend Friday’s meeting
and other events throughout the week, including concerts
featuring Elton John and country signer Luke Bryan. Friday’s
meeting was hosted by actor Hugh Jackman and featured performers
including John Legend, Kelly Clarkson and Jennifer Hudson. Actor
Tom Cruise was also on hand, to praise the company’s efforts in
areas such as the environment and women’s empowerment.

Some 100 OUR Walmart members who work for Wal-Mart came to
Arkansas to protest what they say are Wal-Mart’s illegal
attempts to silence critics who want to see changes.

Wal-Mart employs about 2.2 million people, including 1.4
million in the United States, where it is the largest private
employer. It says that its national average wage for full-time
hourly workers is $12.67 an hour and has not released other
figures. The majority of its hourly associates are full-time
workers.

Wages vary in the retail industry, depending on tenure, the
type of work done and other factors. According to data from the
National Retail Federation, retail wages averaged $13.24 an hour
in 2010. At that rate, an employee working 40 hours a week every
week would earn $27,539.20 annually.

OUR Walmart, part of the United Food and Commercial Workers
International Union, cites IBISWorld data from several years
back that showed Wal-Mart associates, on average, earn $8.81 an
hour. Its members also complain that they are not scheduled for
enough hours, sometimes getting as few as 19 or 22 hours per
week. Some Wal-Mart workers use taxpayer-funded programs to
support their families.

Members of the family of Wal-Mart founder Sam Walton rank
among the richest people in the world. They collectively own
roughly 1.67 billion shares of Wal-Mart, or 50.76 percent of the
company’s outstanding stock.

OUR Walmart does not define itself as a union, although its
members do pay $5 monthly dues.

Kalpona Akter, a former garment worker from Bangladesh who
presented a defeated shareholder proposal at the company’s 2011
annual meeting, joined the OUR Walmart workers to push the
company for changes throughout the week. She presented a
proposal at Friday’s meeting seeking power for owners of 10
percent of outstanding shares to call special meetings. That
proposal and three other shareholder proposals were all
defeated.

“We have a supply chain out of control, and a failed safety
inspection system, in a country (Bangladesh) where apparel
workers are dying by the hundreds. Could there be any more
pressing case for a special meeting of shareholders?”

The New York City Pension Funds said it would vote its more
than 5.1 million shares against nine of Wal-Mart’s 14 board
nominees – including Chairman Rob Walton and CEO Duke.

It is concerned about what it says has been the board’s poor
oversight of compliance as well as a lack of overall
independence. Last year, the New York City funds opposed the
election of five directors.

(Editing by Steve Orlofsky and Matthew Lewis)