What Is Wage Theft?

December 6, 2017

Wage theft is an ongoing problem in which businesses illegally underpay their employees. The majority of wage theft violations stem from companies failing to pay the minimum wage, but other examples include employees working off the books, being forced to clock out early but keep working, having their tips stolen, not receiving mandatory meals or rest breaks, being forced to work through required screenings and processes, and having illegal deductions taken out of their paychecks. A 2017 report on wage theft highlights a variety of statistics, as follows.

Wage Theft is a $50 Billion Problem

The total value kept from employees due to wage theft is $50 billion. Compare that to the $14 billion in theft from robberies, burglaries, motor vehicle thefts and larcenies combined. This $14 billion is just 1/3 of the estimated wage theft cost in the United States!

Lawyers along with Federal and State Departments of labor recovered about $933 million in wage theft monies in 2012. This was not even 2% of the amount that was estimated to have been stolen.

Further, of employees who win their wage theft cases, 83% never receive a dime of money awarded to them. The average wage theft loss per worker is $51 out of weekly averaged earnings of $339. This means that over the course of a year, an average of $2,634 is stolen out of $17,616 in earnings.

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Wage Theft is a Widespread Concern

A study reviewing workers in low-wage industries in New York, Los Angeles, and Chicago found that in any given week, 2/3 of employees were the victim of at least 1 pay-related violation

Out of respondents to a query on wage theft, the majority were female and foreign born, with Latinos and African-Americans experiencing the highest incidents of wage theft.

Fighting Back against Wage Theft

Attorneys and the government are fighting back. Private lawyers recovered $467 million in wage and hour class action lawsuits while the U.S. Department of Labor recovered $280 million from wage and hour violators.

Stronger government enforcement of labor laws and updated legal standards for a 21st-century workplace necessary to combat and halt wage theft.