What is wage theft and what to do if your employer owes you money

We break down this increasingly prevalent form of exploitation in the workplace.

It’s an increasingly fashionable term that’s making the rounds in the working world, but are you familiar with the concept of wage theft? And would you be able to spot this phenomenon if it were to arise in your Desk? We’ve broken down some of the most common forms of wage theft — plus how employers can try to get away with it — and got the inside scoop from an employment law attorney on how to proceed if you think that you could be a victim.

What is wage theft?

Essentially, wage theft occurs when an employer fails to pay the salary or other benefits that an employee has earned.

Some forms of wage theft are easier to spot than others, but there are key signs to watch out for. If you are an hourly worker who regularly works overtime without being paid for that overtime, you are the victim of wage theft. Other common forms include misclassifying an employee as an independent contractor, not paying for earned time off or vacation, being asked to perform work assignments when you are not on schedule, or constantly having to show up early or stay late without compensation.

“Here’s an example from one of our current claims,” ​​says Joshua Konecky, employment law partner at Schneider Wallace Cottrell Konecky LLP. “A worker has to be in the warehouse at a specific time, like 7 a.m. If he’s not there, he won’t have a job for that shift. But they have to go to the warehouse and wait, sometimes up to an hour or two, before being assigned to work or released for the day. They should be paid for this waiting time.

Being forced to work during meal breaks, being required to prepay for a uniform (if after the cost is deducted paycheck, you get paid less than minimum wage), and employers who skip your last paycheck after you quit a job are also considered wage theft.

You are “committed to waiting, not waiting to be committed”

“A legal phrase that you typically see is if an employee is ‘hired to wait’ and not ‘waiting to be hired,'” Konecky explains. Even though you may not be doing productive work, you have still ceded control of your time and authorized activities to your employer.When this happens, you should be paid for that time.

Often, practices that may constitute wage theft are so normalized that they go unnoticed — or employees are conditioned to feel like they’re not doing their part if they raise the issue. Being asked to work beyond your hours isn’t a big step up from the familiar office cultures of presenteeismand checking your email on weekends is easily explained as being a helpful member of a “team”.

Courtney, a restaurant worker in New York, recounted Forbes that she lost hundreds of dollars in unpaid tips, and especially since the pandemic, got used to being paid late, with the excuse that “we all have to contribute right now.”

“You start to believe it’s okay, that’s how things work,” she told the magazine.

How common is wage theft?

Extremely. According to a report by the Economic Policy Institute, American workers recouped $3 billion in lost wages between 2017 and 2020 due to wage theft, but that’s only a tiny fraction of total lost wages. A study cited by PPE believes workers are losing nationwide $15 billion only minimum wage violations every year – and minimum wage workers are far from the only victims of this practice. The total loss for workers is probably several billions more.

How are companies trying to get away with wage theft?

“We typically see pay theft when payments don’t match hours,” says Daniel Altman, chief economist at Instawork. “For example, a company may try to classify legitimate overtime as something else. It could also underestimate hours worked by deducting time from breaks a worker may not have taken or by expecting a worker to complete tasks when not at work. time.

Employers are more easily able to conceal their encroachment on workers’ off-peak hours — especially those of hourly employees — with the rise of working from home and smartphones.

“A worker can check his email when he’s ‘off’, effectively providing free labor to his employer,” says Konecky. “An employer can facilitate these types of free productive time by installing email or team chat software on employee phones, or giving hourly workers phones with these apps.”

Some employers aware of the threat of litigation may even attempt to cover their asses in advance.

“A lot of employers tend to have their employees sign arbitration agreements as a condition of getting or keeping their jobs,” says Konecky.

“These forced arbitration agreements are intended to require employees to bring any disputes before a private arbitrator, rather than a judge in court, and generally prohibit employees from participating in class action lawsuits,” he adds. “In a class action lawsuit, a worker can represent all those harmed by wage theft. The hope of many employers is that this will prevent employees from banding together to assert their rights. It’s important to note that not all “forced arbitration” clauses are enforceable, so you should speak to a labor attorney to review your case.

Are some workers more vulnerable to wage theft than others?

In general, workers are more exploited when they have little bargaining power and are unaware of their legal options to fight back.

“Undocumented workers and people working informally are most at risk, followed by workers who can easily be replaced in a highly liquid labor market,” Altman says. “Workers with low incomes and savings may also struggle to access the legal system. The same goes for foreign workers who may not know their rights or may not speak English well.

Even seemingly small cases of wage theft can have a huge cumulative effect overtime. A full-time worker earning the federal minimum wage of $7.25 an hour who works an extra 15 minutes “off the clock” before and after their shift each day loses about $1,400 per hour. year. That’s nearly 10% of their annual earnings that can’t be used for food or bills – and well over 100 hours of free labor for their employer.

Is anything being done about this?

After a few setbacks, yes. The number of investigators – the people who respond to complaints of wage theft – at the Department of Labor’s Wage and Hour Division (WHD) has dropped nearly 16% under the Trump administration. At the end of January, however, the ministry announcement plans to hire 100 new investigators, and is expected to take a tougher approach with employers in the future.

Some states have also been increasing their own deterrents against less diligent employers and businesses. Connecticut now requires employers to reimburse employees for double the amount of any stolen wages, and Minnesota has a law that specifies criminal charges with jail time and fines of up to $100,000 for those who commit. wage theft. In Washington, D.C., employers who commit wage theft can be convicted of a misdemeanor and sentenced to up to 90 days in jail, in addition to a $10,000 fine for each employee involved. .

What should I do if I have been the victim of wage theft?

First of all, whichever way you decide to go about it, be sure to keep a record of every instance you think you’ve been victimized.

Then talk to your manager. A responsible supervisor should address the issue immediately, but if they don’t, escalate the issue to another manager or to Human Resources. Also keep records of these interactions.

If you are unlucky within the company, you can file a confidential complaint with the Department of Labor by calling 1-866-4USWAGE (1-866-487-9243) Monday through Friday, 8 a.m. a.m. to 8 p.m. EST. You should do this as soon as possible, but the department will accept complaints up to two years after you leave the employer in question. You can also file a complaint through the state, which may have stricter labor laws offering greater potential damages, by visiting your state’s official website and searching for “wage complaint” or “employment complaint”. workplace “.

Make sure you have as much information about your job as possible, including details of wage theft cases. Your employer can’t scold you for filing a complaint, but a paper trail can help protect you if they try to fire you for an “unrelated” reason in its wake.

If you have the funds, you can also hire an attorney and file a private claim alongside your government claim — but be sure to check first whether your state will allow reimbursement of your legal fees if you’re successful. Contingent fees can be a useful option for those who may not have the funds but have a strong case.

“With contingency fees or fee transfer, you don’t need to pay attorney fees or costs upfront,” Konecky says. “Your lawyer can recover it as a percentage of the overall recovery, or separately from the employer at the end of a successful case. This applies whether the employee takes the case to court or to arbitration.