What is wage theft?

One of the most fundamental labor standards in the United States is that workers must be paid for labor. However, wage theft – which occurs when an employer fails to pay an employee for their work – is a significant problem in this country. An estimated $50 billion is stolen from workers each year through paying below the minimum wage, failing to pay overtime, requiring off-the-clock work, or making illegal deductions.

Wage theft disproportionately affects low-wage workers, who often are the most vulnerable and least able to defend their rights. Federal, state, and local laws protect workers from wage theft and give them tools to recover stolen wages from their employers. These laws are only effective if workers know their rights and assert them. Therefore, all workers need to be aware of their rights under the law and learn how to prevent wage theft.

What is an example of wage theft?

Wage theft is the illegal retention of wages or denying of benefits that workers are legally entitled to. It can also refer to working off the clock, being paid less than minimum wage, or being required to do unpaid labor. It can also include harder-to-detect examples, like automatically deducting time for meal breaks or not paying for remote work.

Being paid less than minimum wage per hour is an example of wage theft. Not receiving salaries agreed upon, including overtime, commissions or not being allowed to use paid sick leave, not being paid promised vacations or bonuses, and not receiving final payments on time are also situations of wage theft. Other examples of wage theft are any unauthorized deductions from your pay.

What is employee time theft? 

Time theft is a severe issue for employers, costing them billions of dollars in lost productivity. According to a study, employers lose about 4.5 hours per employee to time theft every week. A different study also reported that 1 out of every four employees admitted to exaggerating their time worked 75% of the time.

Time theft can take many forms, such as taking longer lunch breaks than allowed, coming in late or leaving early, taking excessive sick days, or working on personal projects during work hours. Whatever the form, time theft is a costly problem that erodes trust and undermines team morale. Employers need to be aware of the signs of time theft and take steps to prevent it from happening in their workplace.

Businesses can do a few things to help prevent employee-time theft. First, it is crucial to have clear policies and procedures regarding time and attendance. Employees should be mindful of these policies and their expectations. Second, businesses should invest in time and attendance tracking systems that make it easy to track employee hours and identify potential time theft instances.

Finally, companies should make sure they have adequate supervision to catch any cases of time theft that may occur. Businesses can help prevent employee time theft and improve productivity by taking these steps.

How is wage theft prevented?

The Wage Theft Prevention and Wage Recovery Act is comprehensive legislation to combat this problem. It strengthens worker protections under the Fair Labor Standards Act, making it easier for workers to get the money owed. It creates a new federal crime to commit wage theft violations. Finally, the bill increases penalties for violators, making it easier to hold them accountable.

The Department of Labor’s Wage and Hour Division enforces wage and hour laws. To guarantee that these laws are implemented effectively, the department must provide grants to specified organizations. These organizations can include nonprofits, educational institutions, and other entities with a proven track record of successful grant programs. The Government Accountability Office must study and report on these successful grant programs to determine how they can be replicated and adapted to other contexts. The GAO will help ensure that the Wage and Hour Division can effectively enforce wage and hour laws.

What is the punishment for wage theft?

In the United States, the punishment for wage theft can vary depending on the severity of the offense. The penalties for violating the Minimum Wage and overtime pay are severe. Willful violations may be prosecuted criminally, with violators facing fines up to $10K or prison time as a punishment upon conviction; an additional fine of up 1k per each continued instance where they’ve committed this crime makes it clear that employers won’t escape consequences even if their conduct was unintentional. Violations of the child labor provisions are also subject to a civil money penalty of up to $10,000.

While the penalties for wage theft can be severe, employees who have been victims of this crime should know that they have legal recourse and can file a claim to recover their wages.

Where do you report wage theft?

If you believe that your employer has robbed wages from you, there are options available to you. One is to contact the Department of Labor’s Wage and Hour Division (WHD). The WHD investigates wage theft concerns, and all calls are confidential. You can call the WHD to ask about labor laws, even if you are unsure you want or need to file a complaint. If you choose to file a complaint, you can do so while currently working for your current employer or up to two years after leaving that employer.

However, the Department of Labor recommends filing a complaint as soon as possible, making it easier to collect money that your employer may owe you. When filing a complaint, try to gather as much information as possible, such as contact information for your employer. You can help ensure that you receive your wages by taking these steps.

If you have filed a complaint, someone will contact you within two business days to discuss the situation and the next steps. The complaint’s nature will not be shared with your employer, and your identity will only be revealed with your permission during the investigation. Your employer cannot fire or reprimand you for filing a complaint or raising concerns.

Filing a complaint with the government or your company is a protected action. Your employer cannot retaliate against you, meaning that your employer cannot fire you, give you a negative performance review, demote you, or take any other adverse action against you in response to your complaint. If your employer does take any of these actions, you may have a retaliation claim. 

To prove retaliation, you will need to show that you took a protected activity and that your employer responded by affecting your work negatively. In some cases, it can be challenging to prove that the protected activity was the reason for the adverse action. That’s why it’s essential to keep a written record of your complaint and any other communications with your employer about your concerns. If you find yourself in a situation where you believe your employer has retaliated against you, an experienced attorney can help you understand your rights and options.

What documentation helps process a wage theft and recovery complaint?

As an employee, if you believe that you have experienced wage theft by your employer, certain types of documentation can help process a complaint and potentially recover the stolen wages. Documents may include pay stubs or other records to establish how much you were paid and any communications between you and the employer. Additionally, witness contact information may be helpful, and a schedule shows how many hours you worked. 

Ultimately, any documentation that can help establish the facts of your case can be beneficial in pursuing a claim for wage theft.

Who is affected by wage theft?

Wage theft affects all workers of all ages, races, and genders. However, research shows that companies are more likely to cheat employees of color and immigrant workers. For example, immigrants and Latino workers were twice as likely to earn less than the minimum wage from 2009 to 2019 compared to white Americans. This is likely due to several factors, including discrimination and many immigrants and workers of color are not familiar with their rights. As a result, they are often afraid to speak up or take action. Wage theft robs workers of their hard-earned wages and undermines their sense of dignity and justice. 

A Center for Public Integrity report highlights how immigrants are often not paid fairly by their employers. Through an analysis of Labor Department and U.S. Census Bureau data, it was found that “industries with higher percentages of foreign-born workers had higher rates of wage theft.” The report highlights how employee protections are often not enforced in industries where immigrants work, leaving them vulnerable to exploitation by their employers. The findings underscore the need for better laws and enforcement mechanisms to ensure that all workers are paid fairly for their labor.

In the early 20th century, black workers were paid significantly less than their white counterparts. In some cases, they were paid just 50% of what white workers earned for doing the same job. This Led to significant economic disparities between white and black Americans, only exacerbated by the federal government’s lack of action on the issue. 

Until the Great Depression, Congress first attempted to establish a national minimum wage and overtime pay for workers. However, even then, racial disparities in pay continued to exist. It wasn’t until the 1960s that the federal government began to take steps to address these disparities.

To get Southern Democrats on board with this law, which would have protected Black Americans’ rights, Northern Democratic excluded agricultural laborers, nannies, and housekeepers from the law’s protections, mainly because there was still resentment between North and South over what happened during slavery times. These were the main areas where African Americans worked.

The Equal Pay Act of 1963 made it illegal for employers to pay unequal wages for equal work workers of different races. While this was a significant step forward, much more needs to be done to close the economic gap between black and white Americans.

How can you help fight wage theft?

It is more important than ever that community organizations stand up for low-wage workers in today’s economy. With employee protections under constant attack and employers paying greater attention to their bottom line, workers need all the support they can get.

Over the last decade, workers, advocates, and community leaders have made great strides in combating wage theft in cities and states. They have secured many vital victories through campaigns that have organized direct actions against employers and industries, fought for stronger legal protections, and won increasing funding for enforcement. However, the fight is far from over.

There are many ways that employees can help fight wage theft. First, it is crucial to be aware of the signs of wage theft. If you suspect that you or someone you know has been a victim of wage theft, you should report it to the appropriate authorities.

In addition, you can help raise awareness about wage theft by speaking out about your own experiences or sharing information with others. By working together, we can help end this illegal practice.