In 2017, the Economic Policy Institute did a study of wage theft in the 10 most populous states. The group estimated that 2.4 million people each year lose a total of $8 billion to thefts by their employers. That $8 billion, which again only represents 10 states, was nearly half the total of the annual $16.4 billion in all other property thefts combined.
If their study is representative of all 50 states, the Institute estimates that workers lose close to $15 billion each year to wage theft.
What is wage theft?
Wage theft is anything an employer does to illegally deprive workers of the wages they have earned. It occurs in a wide variety of ways, such as:
- Paying less than the minimum wage
- Refusing to pay for overtime
- Requiring pre-work or after-hours work
- Labeling required activities as something other than work
- Requiring a certain amount of work in a specific time period no matter how long it actually takes
- Denying mandatory breaks
- Making workers pay for uniforms or requiring reimbursement for everyday things
- Misclassifying workers as independent contractors to deny them employment benefits
- Misclassifying workers as exempt salaried workers to deny them overtime
Any time workers are required to do something to benefit the employer but are not paid can be wage theft. Amazon.com is currently facing a lawsuit because it refuses to pay employees for the time they spend in lengthy security checkpoints when they arrive and leave.
In its study, the Economic Policy Institute estimates that the average worker victimized by wage theft loses about $64 a week, or $3,300 per year. Many of these workers are lower-wage workers, including construction workers, garment industry workers, nursing home staff, agricultural workers, cooks and wait staff and the like.
Especially when it comes to misclassification, however, higher-wage workers are increasingly at risk. For example, nurses, certain sales reps and financial advisors are three groups that are often misclassified as exempt from overtime.
In 2018, Good Jobs First found that the large majority of wage theft offenders are among “the giant companies included in the Fortune 500, the Fortune Global 500 and the Forbes list of the largest privately held firms.”
Fighting wage theft can be a challenge
Workers rely mostly on private lawsuits and the Department of Labor to address the problem. In 2018, the Labor Department apparently collected a record $308 million for workers, but that doesn’t come anywhere close to the $15 billion estimated total theft.
If you believe your employer has been denying you your rightful pay or subtracting wages from your paycheck, discuss your rights and options with an experienced employment law attorney.