Wage Theft: How Companies Steal Billions From Workers

Wage theft is an incredibly common crime. Each year, companies are guilty of denying workers fair wages, compensation for the hours they’ve actually worked, promised incentives, bonuses, and benefits, and many other credits earned. Moreover, these and other forms of wage theft result in billions of dollars of loss. 

Sadly, these crimes are often committed against the very people who need the funds they aren’t receiving the most. If you believe that you’re the victim of wage theft, understanding exactly what it is and how it is committed can be the first step towards getting the compensation you deserve.

Understanding the Different Forms of Wage Theft

At its most basic, wage theft is simply failing to pay employees in accordance with federal, state, or local laws. Labor laws exist to keep workers protected from unfair treatment by establishing wage minimums, mandating breaks, and requiring special compensation for overtime, work performed on holidays, and work involving hazardous materials or conditions among other things. 

When owning and operating businesses, people are required to understand the labor laws that apply to their organizations. They must also diligently adhere to them. If they are unable to comply with these laws on their own due to insufficient knowledge or experience, they can always maintain compliance by outsourcing payroll-related actions to appropriate third-parties. 

Common types of wage theft include:

  • Failing to compensate workers at all
  • Failing to pay at least minimum wage
  • Failing to compensate workers for overtime or holidays
  • Failing to release tips to employees who’ve earned them
  • Failing to pay for sick leave

You can visit this website for more examples of wage theft if you need more information. 

It’s important to note that certain failures to pay on the part of employers may be due to oversight, poorly recorded timesheets, or other clerical errors. Thus, the first step in resolving any suspected wage theft is bringing your concerns to your employer’s attention. How your employer reacts to your concerns will likely determine whether or not intentional wage theft has occurred.

Wage Theft and False Promises

Some instances of wage theft occur even when employees are paid according to federal, state, or local labor laws including those pertaining to overtime, sick time, holiday pay, and hazard pay. In these cases, employees have been given written or verbal agreements for pay rates that are significantly higher than the rates at which they’re being compensated. 

For example, if you’ve left a job to take on a new and higher-paying position based upon an impressive written or verbal offer, if your actual rate of pay is far lower than promised, this is wage theft. 

When an Employer Pays but the Check Bounces

Another common example of wage theft is paying employees with checks that bounce due to insufficient funds. No expense that employers face is more important than the payment of employee wages. If your paycheck bounces you should:

  • Contact your employer to report the issue
  • Contact your banking institution to verify that no problems have occurred on your end
  • Reach out to your creditors
  • File a complaint if the problem remains unresolved

In most states, it is a punishable crime for companies to write payroll checks while knowing that they have insufficient funds in their account. If this is the case in your state, you also have the option of filing a police report.

Why Companies Commit Wage Theft

The most obvious assumption is that companies commit wage theft because they do not have enough money to pay their employees as promised. While this is often the case, some businesses assume that their workers will not take action against them. Thus, as long as they are able to do so without complaint, they will continue underpaying their employees, and sometimes not paying them at all. 

Employees may have good reasons for remaining silent about the theft that they’re routinely being subjected to. These can include:

  • Criminal histories or other barriers to seeking employment with alternative companies
  • Undocumented worker statuses
  • Insufficient knowledge of relevant labor laws

Failing to pay employees the legal minimum, or the wages that were promised at the time of hire is a crime. Fortunately, there are always legal avenues that unpaid and underpaid workers can take to obtain fair compensation. 

When payroll checks bounce, employees can file police reports to ensure fast action on the part of their employers. They can also reach out to local, state or federal labor agencies to submit formal complaints. Finally, it is also possible for victims of wage theft to seek due to recompense by working with seasoned employment attorneys.