Wage Theft Explained
If you put in the hours for an employer, you deserve to be paid for your time and effort, both from a moral and a legal standpoint. The Fair Labor Standards Act of 1938 (FLSA) explains it in black and white – American employees must make at least minimum wage for every hour they work, and in many cases, time and half if they work more than 40 hours a week.
However, many American workers, especially women, foreign-born employees and those in low-wage industries, are the victims of wage theft committed by their employers.
Wage theft by companies covers a variety of possible scenarios, including misclassifying employees, forcing them to work off the clock, illegally misreporting hours, and refusing to pay overtime to nonexempt workers. However in many cases, it’s even simpler – some companies just neglect to pay an employee at all.
Those workers most at risk include:
- Contractors and other temporary workers
- Employees for which English is their second language
- Undocumented workers
- Employees in low-wage industries
- Workers who receive a flat rate
- Workers employed by small businesses
Many workers don’t realize how rampant wage theft is. In February 2014, New York Governor Andrew Cuomo announced that the state resolved more than 6,700 wage theft cases in 2013 with disbursements of more than $23 million in back pay to 12,700 workers.
More recently, McDonald’s employees filed seven class-action lawsuits in California, Michigan and New York in March 2014 claiming wage theft by franchisees. Among the claims, workers said they were forced to work off the clock, were not paid until customers came into the restaurants, were not paid overtime, and found their time cards were altered by management. CNN reported that McDonald’s has been required to pay back wages more than 300 times since 1985 because of FLSA violations.
Said one attorney representing the California victims to CNN, “We’ve uncovered several unlawful schemes, but they all share a common purpose – to drive labor costs down by stealing wages from McDonald’s workers.”
Is there hope in claiming back wages?
If an employee is owed back pay, he or she can report the violation to the Wage and Hour Division (WHD) of the U.S. Department of Labor. The agency can help workers reclaim their lost wages and in some cases, may fine the company up to $10,000 upon conviction.
Yet, reporting is not as easy as it has been. Legislatures in states nationwide have slashed the budgets of state agencies that enforce wage laws. While WHD can take many cases, it’s prohibited from investigating some employers covered by state laws.
Reported Salon.com, “Legislatures in Ohio, Wisconsin, South Carolina and Missouri cut their investigative staffs by half or more. This has come as each of those states has added tens of thousands of low-wage workers to its workforce over the past decade.”
For those employees impacted by wage theft and hitting roadblock after roadblock in securing their back pay, an employment lawyer specializing in wage theft can help them navigate the process and assist them in filing a claim against their employer.
Wage theft is a violation of the law just as stealing from a store or cheating on taxes. Only this time, it’s the American worker who has to pay the price for someone who thinks they’re above the law.