At a time when billionaire extraordinaire Elon Musk is dominating headlines with his multi-billion-dollar buying spree, there is another story worth billions that is curiously absent from our Twitter feeds. Unfortunately, rather than recount the spending of riches, this story tells the tale of one of the greatest thefts in American history.
Every hour, millions of workers throughout the United States suffer from one of the most insidious crimes that nobody is talking about: Wage theft. Last December, the Economic Policy Institute (“EPI”) reported that over $3 billion in stolen wages was recovered for workers between 2017 and 2020. However, these wages were recovered only after employees discovered the theft and reported it – in reality, the amount in wages employers steal from their workers is much, much higher. For example, the EPI has estimated that workers across the nation are subject to over $15 billion in stolen wages each year for minimum wage violations alone.
While it might be hard to believe, wage theft is prevalent everywhere, even in the largest and richest workplaces in America. Whether you work in the C-suite or corner grocery store, it is worth asking yourself a simple question: Am I being paid correctly?
Examples of Wage Theft
Wage theft comes in many shapes, sizes, and sophistication. There are many tactics and methods that employers use that are simply not easy to detect by employees. Examples of wage theft can include:
- Working “off the clock” or not being paid for all time worked;
- Illegal deductions from wages, salary, commissions, or other pay;
- Improperly changing timesheets, striking time, or docking pay;
- Time clock rounding or “time shaving” that is not neutral and disfavors the employee;
- Not being compensated at least the minimum wage for all hours worked;
- Being misclassified as overtime exempt;
- Working through meal breaks that are automatically deducted from employees’ time;
- Being misclassified as an independent contractor;
- Not receiving a final paycheck after separation from the employer;
- Not receiving agreed-upon wages;
- Not receiving wages in a timely manner;
- Tip-sharing and tip-pooling violations;
- Failure to pay for time spent donning and doffing gear and equipment;
- Failing to pay for travel time during normal work hours; and
- Not paying for remote work.
These are just some of the many methods employers can use to steal wages from their employees. Of course, whether an employer has violated the law is sometimes a complex legal question requiring analysis of various federal, state, and local laws.
Laws Prohibiting Wage Theft
Thankfully, employees often do have recourse if they are victims of wage theft. Depending on the potential violation, many different laws could be implicated.
For example, the Fair Labor Standards Act (“FLSA”) provides that nonexempt employees are entitled to overtime pay of one and one-half times their regular rate of pay after surpassing 40 hours of work each workweek. Additionally, minimum wage guidelines are set by federal, state, and sometimes even local governments. Importantly, if your state or local government has set a minimum wage higher than that of the federal minimum wage, your employer is required to pay whichever is the highest. Some states and jurisdictions have even set more favorable overtime requirements than what is provided in the FLSA.
Of course, as discussed above, wage theft does not just implicate minimum wage and overtime violations. It can also occur when employees are not paid for their total hours worked, are subject to illegal deductions from pay, or are having their timesheets illegally altered through various time rounding or automatic time deduction policies. There are many federal, state, and local laws and regulations which might prohibit these practices. For a more detailed overview of wage theft laws in the DMV area, please see our DMV Survey Series: Wage Theft Edition, located here.
Wage theft results in billions being stolen from the paychecks of workers each year. It affects millions of employees in workplaces across the nation. It can happen in factories, retail stores, high rise office buildings, and even from the comfort of your home. Simply, it does not matter how much money a worker is paid – employees at all levels, in all industries, and in every tax bracket are susceptible to wage theft.
If you think you may be a victim of wage theft, it is important for you to consult with a skilled wage and hour attorney to properly determine if any laws have been violated and if you may be entitled to relief. Depending on the violation, you may be entitled to substantial damages, including payment for wages owed, liquidated damages in an equal amount, interest, and/or attorneys’ fees and costs.