Wage theft in the United States in the U.S., expressed in billions of
US dollars. Figures are from the
FBI's Uniform Crime Reports for 2012. According to some studies, wage theft is common in the
United States, particularly against
low wage workers, including citizens and
undocumented immigrants. Some rights violated by wage theft have been guaranteed to workers in the United States in the 1938
Fair Labor Standards Act (FLSA). In 2019, the
U.S. Department of Labor cited about 8,500 employers for taking about $287 million from workers, but they rarely punish repeat offenders, which "perpetuates income inequality, hitting lowest-paid workers hardest." 2023 studies showed that a significant amount of wage theft goes unreported because employees may not fully understand what constitutes wage theft, or they fear reprisals, and so most of the theft, estimated at $50 billion per year, is not recovered.
Forms Overtime According to the FLSA, unless exempt, employees are entitled to receive
overtime pay of at least "
time-and-a-half", or one and one-half times normal pay, for all time worked past forty hours a week. Some exemptions to this rule apply to public service agencies or to employees who meet certain requirements in accordance to their job duties along with a salary of no less than $684 a week. A 2009 study of workers in the United States found that in 12 occupations more than half of surveyed workers reported being denied overtime pay: child care (90.2 percent denial), stock and office clerks (86 percent), home health care (82.7 percent), beauty/dry cleaning and general repair workers (81.9 percent), car wash workers and parking attendants (77.9 percent), waiters, cafeteria workers and bartenders (77.9 percent), retail salespersons (76.2 percent), janitors and grounds workers (71.2 percent), garment workers (69.9 percent), cooks and dishwashers (67.8 percent), construction workers (66.1 percent), and cashiers (58.8 percent).
Minimum wage In 2009, reform placed the new
United States federal
minimum wage at $7.25. Some states have legislation that sets a state minimum wage. In the case an employee is subject to both federal and state minimum wage acts, the employee is entitled to the higher standard of compensation. For tipped employees, the employer is only required to compensate the employee $2.13 an hour as long as the fixed wage and the tips add up to be at or above the federal minimum wage. Minimum wage is enforced by the
Wage and Hour Division (WHD). WHD is generally contacted by 25,000 people a year in regards to concerns and violations of minimum wage pay. A common form of wage theft for tipped employees is to receive no standard pay ($2.13 an hour) along with tips.
Illegal deductions Employees are subject to forms of wage theft through illegal deductions. Trivial or fabricated violations in the workplace are used to validate deductions. Any deduction that brings an employee to a level of compensation lower than minimum wage is also illegal. In many states, employers are required to issue employees documentation of deductions along with earnings. Failure to issue this documentation is generally prevalent in work places subject to wage theft.
Other forms Putting pressure on injured workers to not file for
workers' compensation is frequently successful. This compares to national annual losses of $340 million due to
robbery, $4.1 billion due to
burglary, $5.3 billion due to
larceny, and $3.8 billion due to
auto theft in 2012. -->
Workers at risk Studies have found inflated rates of wage theft violations in markets employing women and foreign-born populations, and there are indications that wage exploitation and wage theft are among key motivations of employers for hiring migrant workers. Within the foreign-born population, women were at a much greater risk for wage violations than their male counterparts. Undocumented workers or unauthorized immigrants stood at the highest risk levels. Education, longer
tenured employment, and
English proficiency proved to be influential factors in employee populations. All three variables reduced the probability of wage theft for the aforementioned
demographics. Workplaces where the compensation was paid in one weekly flat rate or in cash saw a higher instance rate of wage theft. Smaller businesses with less than 100 employees also saw a higher instance rate of violations than larger business. In one study, the
manufacturing industry,
repair services, and private home employment were at the highest risk for violations at the workplace.
Home health care, education, and construction saw the lowest levels of wage theft. Restaurants, grocery stores, retail, and warehousing fell around the
median.
Contemporary examples In a report released on November 26, 2011, a
Palm Beach County organization, People Engaged in Active Community Efforts (PEACE), sent postcards to
Macy's and
Bealls executives as a form of protest. The Florida Retail Federation had recently proposed a bill to block a wage theft ordinance in their county, which was intended to create a system that would speed the investigation and processing of wage theft reports. A 2012 study by the Iowa Policy Project calculated that dishonest employers defraud Iowa workers out of about $600 million annually in wages. State Senator
Tony Bisignano, Democrat from
Des Moines, and Senator
William Dotzler, a Democrat from
Waterloo, Iowa, proposed a bill to strengthen wage law enforcement on January 28, 2015, "since Iowa's wage theft laws are so weak they are impossible to enforce". The Iowa Association of Business and Industry opposed the bill, saying that resources for enforcement should be the focus instead. In 2021, Tyler Technologies paid $3 million to settle claims that it had required some employees to work overtime, and had not paid them for that time.
Enforcement Documentation In the United States, the
Fair Labor Standards Act (FLSA) requires employers to keep detailed records regarding the identity of workers and hours worked for all workers who are protected under federal
minimum wage laws. Most states require that employers also provide each worker with documentation every pay period detailing that worker's hours, wages, and deductions. As of September 2011
Arkansas,
Florida,
Louisiana,
Mississippi,
Nebraska,
South Dakota,
Tennessee, and
Virginia did not require this documentation. A 2008 survey of wage theft from workers in
Illinois,
New York, and
California found that 57% of low wage workers did not receive this required documentation and that workers who were paid in cash or on a weekly rate were more likely to experience wage theft. may also be common in instances where employer record keeping does not comply with the law.
Penalties and sanctions When the
Wage and Hour Division (WHD) receives reports of violations, it works to ensure that employers change their work practices and pay back missed wages to the employees.
Willful violators can face fines up to $10,000 upon their first conviction with
imprisonment resulting from future convictions. In regards to
child labor laws, an employer can face a fine of up to $11,000 per minor. In 2012 the Wage and Hour Division collected $280 million in back wages for 308,000 workers. As of 2014, there are 1,100 federal investigators for 135 million workers in more than 7 million businesses. The ratio of labor enforcement agents to U.S. workers has decreased over tenfold since the inception of the FLSA, from one for every 11,000 workers in 1941 to one for every 123,000 workers in 2014.
Australia A 2020 report by
Unions NSW found that more than 3,000 foreign-language job ads offered illegally lower wages. A 2022 report by the same union found that over 7,000 job advertisements written in foreign languages offered illegally low wages. In Australia, another form of wage theft is the failure of employers to pay the mandatory minimum contribution to employee's
superannuation fund. Between 2009 and 2013 the
Australian Taxation Office recovered A$1.3 billion in unpaid superannuation which is estimated to be only a small portion of total unpaid superannuation. During 2019 and 2020 members at the
University of Melbourne formed a casuals' network to deal with issues of wage theft. This culminated in the university issuing an apology and repaying $45 million in wages to current and former staff.
Canada In 2012 in
Windsor, Ontario nearly 200 people gathered at a grassroots meeting to discuss daily workplace challenges that workers face, including wage theft, which a labor union president described as "a sad state of affairs when you have a corporation that can dictate items".
United Arab Emirates In the UAE, many employers have taken money out of their workers' wages. In some cases, workers have not been paid or workers are duped.
United Kingdom A 2017 report by Middlesex University and
Trust for London revealed that at least 2 million workers in Britain are losing an estimated £3 billion in unpaid holiday pay and wages per year. It suggested that withholding holiday pay, not paying wages and workers losing a couple of hours money per week are some of the deliberate strategies used by employers to improve their profits. ==See also==