wage theft

If you are one of America’s 30 million low-wage workers, it is becoming increasingly likely your employer is, essentially, stealing from you.

As business owners squeeze costs and cut corners by using franchise operators, subcontractors, and temp agencies, government officials are reporting a record number of enforcement actions to curtail what is loosely referred to as “wage theft.” In fact, the Economic Policy Institute estimates that wage theft could be costing workers more than $50 billion a year.

While agriculture, garment manufacturing, home health care, retail and restaurant work are the industries with the most reported cases of wage theft, these days even white-collar jobs are affected. In 2014, a class action lawsuit was brought on behalf of software engineers against Google, Apple, Intel, and Adobe, and ended up settling for more than $324 million.

Categories of wage theft

Wage theft can take a variety of forms; here are some of the more common:

  • Not paying overtime: Employers are required to pay time and a half for all hours worked above 40 per week. Wage theft occurs when employers manipulate how time is recorded by requiring workers to work off the clock either before their shift begins or after they punch out. Falsifying time records has also been known to occur.
  • Paying below the minimum wage: Some employers have violated the minimum wage law by misclassifying whole groups of workers as independent contractors or unpaid interns, by failing to pay tipped employees the minimum of $2.13 per hour or $7.25 after tips, or by requiring employees to pay for mandatory expenses like equipment or uniforms.
  • Shorting the hours worked: Employers are required to pay you for all the hours you work, including prep time, cleanup time, and time to travel between sites.
  • Not giving employees a final paycheck after leaving a job: Employers are required to pay workers in a “reasonable amount of time” which is usually by the next payday or at the latest within 30 days.

What you can do about it

If you think you’re the victim of wage theft, the first thing you should do is compile any documentation that might be helpful in proving the theft is taking place. Copies of pay stubs, personal records of hours worked, or other records of your employer’s pay practices could end up being very helpful.

Next, try searching for a worker rights center or other economic justice organization in your area. Generally, they will educate you about your rights, advocate on your behalf if necessary, and often provide legal referrals.

Since worker centers are not present in all locales, another option is finding an attorney who specializes in labor or employment law and filing a lawsuit. Assuming your income is low enough to fall within the proper guidelines, another option is finding a local legal aid organization where you can get free counsel.

The Department of Labor

Another route involves filing a complaint with the US Department of Labor’s (DOL) Wage and Hour Division or your relevant state labor or employment agency. The DOL has over 200 offices that provide free and confidential services.

If you live in a rural or urban location lacking in legal aid organizations and private attorneys, this may be your best option. It is important to note that the statute of limitations on filing wage theft claims is generally only two years or three if the violation involves willful conduct.

While it is illegal for your employer to fire you or retaliate against you for filing a complaint or lawsuit, it still happens. It is always wise to be cautious, seek advice if possible, and compile evidence in the unfortunate circumstance that you find yourself retaliated against.

Finally, if you are a business owner and want to make sure you craft agreements with vendors and contractors that are not vulnerable to charges of wage theft, consider having your documents reviewed by a lawyer, to make sure your compensation structure is in proper order.