Wage theft is the unlawful practice of employers not paying their employees the full amount for the work they have performed. If this sounds fairly broad, that is because wage theft can be perpetrated in a number of different ways, both by breaking the law and by not adhering to a contractual relationship. Here is a short guide to wage theft, and what your legal recourse is if you think you are a victim of such practices.
As mentioned above, wage theft is an umbrella term that covers a wide variety of improper pay practices. These include not paying workers minimum wage, withholding overtime pay, forcing and employees to work off the clock and during breaks or meal times, and simply not paying them for all the services they have performed for the company.
One practice that might not spring to mind immediately is if an employer intentionally misclassifies an employee’s position to avoid paying them more money. For example, if an employee does all the tasks that a manager would do but only receives the pay of a part-time hourly employee, then that person is likely not being properly compensated for all the responsibilities they are given by their boss or bosses. Violating employment contracts can also qualify as wage theft, if the worker is not receiving the pay agreed upon in writing.
If you’ve ever seen a W2 form from the IRS, you know that your employer takes some money out of your paycheck for taxes. Companies may illegally take more money than is necessary to pay their taxes out of their workers’ wages and pocket the rest, resulting in another type of wage theft.
On the federal level, wages protections are controlled by the Fair Labor Standards Act, also known as the FLSA. This law protects all employees, but be careful about classification. Some companies attempt to incorrectly label their workers as independent contractors instead of full-fledged employees to avoid some of FLSA regulations.
If the employer has the power to hire, fire, or discipline the worker as well as control the nature and amount of their work, then they cannot deny those persons the protections of an employee under federal law. And while federal law does control quite a bit about wages and worker rights, each state may have their own additional laws and protections, so be sure to check with a lawyer in your jurisdiction if any such rights apply to your case.
Although the terms may sound similar, they are not completely interchangeable. The legal term of unfair wages refers more specifically to an employee being underpaid compared to another worker in the same or very similar job. This is calculated according to the type of job/tasks being performed, area, and other factors. To put it simply, a claim of unfair wages is a type of wage theft that often ties into employment discrimination laws.
There is one big exception to the rule when it comes to wage theft laws and the FLSA, specifically referring to the minimum wage mandate. The FLSA states that in that jobs where “the employee customarily and regularly receives more than $30 a month in tips," the minimum wage standard does not apply. The most obvious example is waiters and waitresses, who make the majority of their money from customer tips.
If you believe you are the victim of wage theft, the law entitles you file a claim against your employer for monetary damages. If your case is successful, you can receive all of the unpaid wages owed to you under the law (commonly known as back pay) and have the company pay your legal fees as well. If you can also prove that you suffered additional economic losses, such as missed business opportunities, as a result of the employer’s actions, then a jury can also award money for these as well.
For those looking to report wage theft to the authorities, The Department of Labor’s Wage & Hour Division has about 200 offices all over the country where you can file a formal complaint and submit evidence. Federal employees will then investigate to see if any laws have been broken, and if so, will collect back wages on your behalf.
Every state has their own similar department to enforce state wage laws, so knowing if the violation is a federal or state one is very important. It is imperative to point out that if you file a federal complaint, you are barred from pursuing a case in civil court as well. Most states have the same restriction.
Yes. Because of the restrictions mentioned above as well as the complicated nature of legal matters in general, speaking to an employment lawyer before you file anything is the best way to preserve your rights. A good attorney will help you decide the best course of action and be your advocate every step of the way.