Wage Theft: What is it and Who is at Risk?
Wage theft occurs whenever an employer fails to pay everything an employee is owed by law. It is a surprisingly common issue, with employees in the United States being underpaid by as much as $50 billion every year. No worker is immune to wage theft, but those in low-wage industries such as food service, hospitality, retail, and janitorial services are especially vulnerable, as are contract workers who are part of the gig economy.
Wage theft can take away as much as 10 percent of a worker’s annual earnings, so it’s important that you can spot it if it happens to you. Fortunately, there are things that you can do to combat wage theft and ensure that you are paid what you’re owed.
Forms of Wage Theft
Wage theft can take many forms, with some being more common than others. One common form of wage theft is paying less than the minimum wage. The federal minimum wage for nonexempt employees is $7.25 an hour, but many states have their own minimum wage laws. If your state has a minimum wage that is higher than $7.25 an hour, you are entitled to the higher wage.
Other forms of wage theft include:
- Not paying overtime wages to employees who work more than 8 hours a day or more than 40 hours a week
- Requiring employees to work off-the-clock
- Making unauthorized deductions from paychecks
- Misclassifying workers as independent contractors to avoid paying the minimum wage
- Stealing an employee’s tips
Identifying Wage Theft
Wage theft can be difficult to identify sometimes, especially if you’re a low-wage worker or you’re relatively new to the workforce. The best way to know if your wages are being stolen is to pay attention to the hours that you work and what you earn for your pay. If you work more than 8 hours in a shift or 40 hours in a week, make sure that you are being paid overtime rates for the extra hours worked. You should also never be expected to do work before you’ve clocked in for a shift or after you’ve clocked out. If you do any work outside of your regular shift, you should be compensated for it. If you receive tips from customers, you should be allowed to keep all of it. Many employers pool tip money that is earned and use it to supplement the wages of untipped workers.
Finally, be wary of employers who pay in cash or who do not provide a pay stub or other documentation for wages earned. This is a common method of cheating workers out of the pay that they’re owed.
If you believe that you are a victim of wage theft, keep close records of all of the hours you work and the money you earn. If the numbers aren’t adding up, you can file a wage claim with your state’s department of labor or contact an attorney for more complicated cases.
