Workers Lose Billions in Unpaid Wages Every Year

Fact Sheet July 11, 2023

Enforcement of Fair Pay Laws Is Key to Protecting Workers’ Paychecks and Promoting Good Jobs and a Level Playing Field for Employers

Corporations steal billions of dollars from their workers each year, resulting in losses to the economy and wreaking havoc in the lives of millions of workers. The failure to enforce wage laws creates severe economic insecurity for workers and encourages dishonest employers to continue their illegal wage practices—in effect subsidizing abusive business models at the expense of honest, law-abiding employers. According to an analysis of existing survey data by the Economic Policy Institute, an estimated $15 billion is lost just to minimum wage violations every year.[1]

Although the nation’s fair pay laws have been on the books since the turn of the 20^th century, enforcement remains startingly rare, especially in light of increasingly aggressive trends such as corporate fissuring (which has created confusion for agencies and workers about who is responsible for wage violations) and corporate imposition of take-it-or-leave-it arbitration and collective action waivers that prohibit workers from having their day in court to recover unpaid wages. While more states are raising their minimum wage, the federal minimum wage remains stuck at a pitiful $7.25 per hour, or $15,000 per year for full-time work. And when employers do not even pay those minimum wages, workers and the economy suffer, especially in key jobs—in construction, building services, home and health care, hospitality, food processing and agriculture, warehouse, transportation, logistics, and manufacturing—that are supposed to drive our economic recovery. It is crucial that these jobs are not undercut by employer wage theft, which has been called a “national emergency.”[2]

Now is the time to act! As the federal government invests billions in infrastructure and climate jobs, these subsidies must align with good-jobs principles.