- Wage theft is when an employer withholds benefits, such as breaks or compensation, that an employee has already worked for.
- Wage theft often goes unreported either because employees are not aware of what they’re owed or because they fear retaliation.
- Employees can file complaints against their employers to the Department of Labor and, depending on where they live, the department of labor in their state.
In the face of the “Great Resignation,” employees are reevaluating their relationship with their employers and taking stock of their rights as a worker. Employees are increasingly exercising the rights afforded to them by the US government, specifically the Fair Labor Standards Act (FLSA) which, among other things, guarantees a minimum wage and overtime pay. If employees don’t provide these to their employees, they are committing wage theft.
Wage theft comes in many forms, some of which can slip under your radar. Here’s what to look out for and what to do if wage theft happens to you.
What is wage theft?
Wage theft occurs when an employer doesn’t pay an employee the benefits they’ve earned, be it wages or other benefits such as a lunch break. It’s one of the most costly crimes in America, but one of the most subtle. From 2017 to 2020, a total of $3 billion dollars was recovered in stolen wages, which is just a fraction of the overall cost of wage theft.
Saba Waheed, the research director at UCLA’s Labor Center, says that the reason wage theft is so common is because many employees aren’t aware of what constitutes wage theft. “We don’t do labor training in our schools,” Waheed says.
Wage theft can be as simple as your boss asking you to stay an extra 15 minutes after you’ve clocked out to close up shop. You may say yes because you want to be helpful or because 15 minutes doesn’t seem like that much time. Yet, this is still unpaid labor, and that time adds up. “There’s like a level of informality,” Waheed says. “It’s so normalized that even viewing it as some kind of theft would be such a surprise to folks.”
Let’s say you work somewhere that pays you the federal minimum wage of $7.25 an hour for 40 hours a week. At this job, you stay an extra 15 minutes each shift to help with miscellaneous tasks. So you’re working 260 shifts throughout the year and devoting an extra unpaid 15 minutes of your time for each shift to help out. By the end of the year, you will have worked 65 unpaid hours, the equivalent of 8.125 full shifts. That would have earned you over $470 before taxes.
Some may think that isn’t a lot of money — but it actually is to a lot of people. In fact, in 2018 the California Supreme Court ruled against Starbucks in a wage theft case over $100 of missed pay. California Supreme Court Justice Goodwin Liu wrote that “$100 is enough to pay a utility bill, buy a week of groceries or cover a month of bus fares. What Starbucks calls ‘de minimis’ is not de minimis at all to many ordinary people who work for hourly wages.”
Wage theft demographics
In 2021, the Department of Labor reported a total of $230 million recovered in back pay for employees. The most frequent filers were food service workers, followed closely by construction workers. The two industries together made up a total of over $70 million in back wage recovery. Retail, agriculture, and healthcare are also common industries where wage theft occurs.
The types of wage theft within each industry vary. For example, food service workers often filed complaints because they weren’t reimbursed for uniform purchases, which employers are supposed to cover. On the other hand, employment misclassification, which usually consists of a company classifying a worker as an independent contractor while assigning them the responsibilities of a full-time employee, can affect a wide range of industries like technology.Though one of the country’s most costly crimes, it’s important to note that these crimes do not affect everyone equally. Wage theft most heavily affects people who work minimum-wage jobs as well as women, people of color, and immigrants. A 2009 survey found that 26% of low-wage workers experienced wage theft, but the National Employment Law Project (NELP) says that this statistic is likely a “very conservative estimate.”
Read the full article in Business Insider
