Although many people are aware that wage theft occurs, most do not know just how common it is. In fact, many people mistakenly assume that wage theft is something that rarely happens. And many people naively believe that most instances of wage theft are just mistakes or the result of miscommunication.
Unfortunately, the truth is that wage theft has been identified as the largest type of theft in the United States. It is responsible for roughly 3 times as much economic loss as other types of theft combined. According to a report from the National Employment Law Project, in 2019 approximately $9.27 billion in wages was stolen from workers who earned less than $13 an hour. So, while people often worry about things like auto theft, bank robberies, shoplifting, and home burglaries, the truth is that wage theft affects far more people than these more well-known crimes.
What is wage theft?
According to the Economic Policy Institute, “Wage theft occurs any time employees do not receive wages to which they are legally entitled for their labor.” Ihna Mangundayao, et al., “More than $3 billion in stolen wages recovered for workers between 2017 and 2020,” (Dec. 22, 2021).
How does wage theft happen?
Wage theft can happen in many different ways. For example, employers can steal from employees by misclassifying them as independent contractors or as exempt from state and federal minimum wage and overtime laws. When workers are misclassified, employers pay them straight time instead of overtime for working more than 40 hours a week.
Tipped employees are particularly vulnerable to wage theft. Employers rob workers by taking tips that were intended for their employees. Even in a situation where a tip pool is being used, it’s illegal for the employer to be included. Employers also violate wage laws when they fail to pay tipped workers the difference between their tips and the applicable minimum wage.
Employers also engage in wage theft when they deny workers legally mandated meal and rest breaks.
Some employers cheat workers out of their rightfully earned income by shaving their hours or by requiring them to work off the clock. Time shaving often occurs when employers have control over electronic timekeeping systems or timesheets, which gives them the ability to change when workers clock in and clock out. Employers use these schemes to pay workers for fewer hours than they actually worked.
What can you do?
If you suspect that you have been victimized by wage theft, as so many people have, take the time to look into all of your legal options. You can fight back.