Wage Theft

If you’ve been a victim of wage theft you’re not alone. According to one study done by the Economic Policy Institute, workers around the country lose more than eight billion dollars per year to wage theft. If you’ve been the victim of wage theft you can file a claim against your employer to recover all the wages you are owed. All workers in the United States must be paid at least minimum wage and you must be paid for all your work. If your employer is not paying you at least minimum wage or they are engaging in other types of wage theft you have a right to file a claim against them.

What is Wage Theft?

Wage theft occurs anytime that a worker isn’t paid for their work. It’s that simple. If you are working you are entitled to be paid for the time you work. And if you work more than 40 hours in a week you are entitled to the overtime rate for all time worked past 40 hours.

Unfortunately, employers do often try to get workers to work for free, refuse to pay them for time worked, or try to deny them overtime rates or other special pays. Wage theft is very common, especially in service industries where workers receive tips. Servers and other workers that get tips as part of their income often report that their employer takes their tips. Employers are not allowed to keep your tips.

Wage theft costs workers billions of dollars every year. Studies show that workers are commonly underpaid and not paid overtime pay even when they work significant overtime hours. The Fair Labor Standards Act is a Federal law that dictates employers must pay employees at least minimum wage and establishes many other rules about pay and work time that employers routinely violate.

Examples of Wage Theft

There are many different types of wage theft. Common types of wage theft include requiring employees to come in 15 minutes before a shift to get ready for their shift but not paying them for that 15 minutes. Or requiring employees to stay 15 to 30 minutes after a shift to close out their workstation but making them clock out and not paying them for that time. The most common forms of wage theft are:

• Minimum wage violations
• Not being paid on time
• Paychecks bouncing
• Not being paid for hours worked
• Being paid only a portion of your total paycheck
• Employer taking your tips or requiring tip out
• Taking money from your paycheck for meals or uniforms
• Requiring employees to work through lunches or breaks that are not paid
• Unpaid overtime
• Off-the-clock work
• Misclassification of employees as independent contractors
• Illegal deductions from wages

These are just the most common forms of wage theft. There are other types of wage theft that you might experience that are industry specific. Typically, the industries most affected by wage theft are service industries and retail. Any industry where most of the workers are paid hourly is likely to have some degree of wage theft.

Laws that Protect You from Wage Theft

If you are working in the United States you are protected by the same laws that protect all workers. Your legal status in the United States doesn’t matter when it comes to workplace protections. The Fair Labor Standards Act is the primary Federal law that regulates wages in the United States. According to the FLSA employers must:

• Pay at least minimum wage. If the employer is in a state where the state minimum wage is different from the Federal minimum wage the employer must pay the higher minimum wage.
• Pay overtime rates for any time worked in excess of 40 hours in a work week.
• Pay employees for all time worked, and time worked includes time when the employee is required to be on the premises. So for example if your employer says that employees must arrive 15 minutes before a shift to perform pre-shift duties they must be paid for that 15 minutes.
• Keep records of all time worked for all employees and must display a poster showing all of the FLSA requirements.

There also may be state laws regarding wage theft and overtime pay that protect employees. Those laws vary by state.

The Equal Employment Opportunity Commission is a Federal agency that investigates all workplace rights violations in every state. The state labor board or division of labor in the state you work in can investigate claims that state laws were violated. When you file a complaint against your employer with the EEOC the state labor board will receive a copy of the complaint and all of the supporting evidence and documentation. The state will decide based on that documentation whether or not to investigate. You don’t have to file a complaint with both the EEOC and the state.

Forms of Wage Theft

Employers that engage in wage theft count on employees not knowing their rights under the FLSA and other laws to get away with wage theft. Some things you should know about types of wage theft are:

• Failure to Pay Minimum Wage

  The minimum wage is the baseline that all workers must be paid for their work. Even if the position is tip-based there is still a minimum wage that you must be paid. If your tips don’t equal the minimum wage then the employer must pay the difference. If your state has a different minimum wage than the Federal minimum wage your employer must pay whichever is the higher wage. If your employer doesn’t pay minimum wage, or keeps your tips because they are paying you minimum wage, that's wage theft. Your employer could be forced to pay you money for the wages that legally you were supposed to receive.

• Not Paid Overtime

  If you are not paid overtime but you’ve worked more than 40 hours that’s wage theft. You must be paid time and a half for all time worked over 40 hours in a work week. Your employer can’t change your schedule to avoid paying you overtime. Overtime pay regulations are based on the standard eight hour per day workday.

• Employee Misclassification

  Another common way that employers engage in wage theft is by deliberately classifying employees as independent contractors instead of full employees. Employers do this to avoid required deductions and to avoid paying minimum wages and offering benefits like health insurance. By classifying employees as independent contractors employers deny employees the protections given by the FLSA. But in 2021 the U.S. Dept. of Labor published the final Independent Contractor Status Under the Fair Labor Standards Act which protects independent contractors so that employers can’t use misclassification as a way to take wages or benefits away from workers.

Minimum Wage Violation Penalty and Other Wage Theft Penalties

Employers are required to comply with all Federal and state laws regarding worker pay and compensation. They must abide by the required record-keeping provisions in the FLSA and keep accurate records of all time worked for all employees, including overtime worked. Employers are also required to provide clear and accurate wage statements like pay stubs that show a breakdown of all money paid for that pay period as well as year to date payment.

Employers who violate the FLSA can face civil and criminal penalties, including hefty fines. They can also be required to pay out lump sums of money for back wages, pain and suffering, and other penalties to the workers. In some cases after an EEOC investigation companies have been required to pay millions of dollars to their employees for lost wages.

How to Report Wage Theft

If you have been a victim of wage theft by an employer you should file a complaint with the EEOC. You can start a claim online or you can make an appointment at any EEOC office to start the claim in person. You will also need to submit supporting documents to show how your employer engaged in wage theft and what wages you are owed. You will need to submit documents like your work schedule, any documentation from the employer stating that you are an independent contractor and not an employee, your pay stubs, evidence of what tips you didn’t receive, and other documentation showing how the employer stole wages from you or violated the FLSA.

Work with a Wage Theft Lawyer

You don’t need to work with a wage theft lawyer to make a case for wage theft against an employer, but it can be a big help. A wage theft lawyer can help you navigate the tricky process of proving wage theft. Because a wage theft attorney has experience building cases against employers they can guide you when it comes to knowing what evidence needs to be included with a claim and what parts of the FLSA your employer has violated.

It doesn’t cost anything up front to talk with a wage theft lawyer. Wage theft attorneys are paid on a contingency basis. That means they don’t get paid until you get a settlement, and if you don’t get a settlement you don’t pay anything. Typically the contingency fee for a wage theft attorney is 33% of the settlement amount. But the amount of the contingency can be built into the settlement amount.

Talk To A Wage Theft Attorney

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