What is Wage Theft?
Nobody wants to work for free. And employers are legally required to pay their hourly employees for their hours worked. Unfortunately, some employers find ways to skirt paying their employees in full or at all. According to the Economic Policy Institute, wage theft costs American workers as much as $50 billion each year.
In this post, we’ll go over the details of wage theft and what to do if you believe you are the victim of wage theft in New York.
What Is Wage Theft?
Wage theft refers to any instances where employees don’t receive a benefit (often pay) they’ve earned. Other common benefits that can be stolen in wage theft include meal and rest breaks and the right to worker’s compensation. Wage theft can take place explicitly with nefarious intent or can happen unintentionally by employers who are not informed or aware of labor laws.
Signs of Wage Theft
Common signs of wage theft include:
- A paycheck that is continuously incorrect, even after the employee has approached the employer about it
- Employees not being given access to their right to a meal break
- Employees being asked to do work off the clock
- Hourly workers who work overtime but are not paid for it
- An employer misclassifying an employee’s work status to prevent them from receiving minimum wage or overtime pay
- Employers making employees pay upfront for their uniforms or taking the cost of their uniforms from their paycheck
- Employees being asked to purchase things for the job without being reimbursed by the employer
- An employee leaving a job and not being paid their final paycheck
- Being issued a paycheck that “bounces”
Who Is Most at Risk for Wage Theft?
The employees who are most at risk for wage theft include:
- Contractors
- Temporary workers
- Employees who are not native English speakers
- Undocumented workers
- Employees who are paid “under the table”
- Employees working in low-wage industries
- Employees who receive flat rates
- Employees employed by small businesses
- Employees of color — research found that immigrants and Latino workers were twice as likely to earn less than minimum wage from 2009 to 2019 compared to their white counterparts. Black workers were also nearly 50% more likely to be ripped off by their employers.
Tip Theft
Tip theft is a common type of wage theft that takes place in restaurants and other service-related jobs where workers rely on tips to supplement their wages. The tip belongs to the employee, not the employer. However, some employers try to take advantage of this and try to take a large share — or all — of their employee’s tips. Tipped employees are among the most frequent wage theft victims.
Employers are permitted to take a “tip credit” against minimum wage, but they must follow the tip credit law, which reduces the hourly wage the employer must pay if their employees receive tips.
Unfortunately, some employers try to take advantage of this by taking an unlawful tip credit, which often results in their employees earning less than minimum wage.
Commission Payments
Certain businesses that pay commission instead of wages, such as car dealers and real estate agents, are often paid a combination of base pay and their commission by cautious employers in order to ensure the salesperson receives at least minimum wage for their work. In these instances, if a salesperson’s commission does not equal minimum wage, the employer will add in extra pay to cover the difference.
Some employers use the “draw” system in which they add on to the commission until the minimum wage is reached, but deduct it from future commission payments. Although this practice is not illegal, it can result in employees not receiving minimum wage during certain pay periods. It’s important to remember that failing to pay minimum wage in every pay period constitutes wage theft.
Salaried Employees
Certain salaried employees may be exempt from minimum wage and overtime laws — these employees are not entitled to overtime pay if they work over 40 hours in a given week. But, this exemption can only apply if the employee is considered exempt under the law.
Some employers try to claim that employees are exempt when, in fact, they may not meet the strict federal requirements for exemption. By doing so, they are deliberately misclassifying employees to try to avoid paying overtime wages their employees have earned. This type of misclassification is a form of wage theft.
What Can be Done About Wage Theft?
If you are the victim of wage theft, it’s important to know that you can sue your employer for unpaid wages. You may also be able to recover the cost of retaining an employment or labor lawyer to help you fight your case.
In addition to recovering the wages you are owed, you may also recover an equal amount of “liquidated damages,” which are intended to punish the employer for breaking the law.
You do not need to wait until your employment is over before you file a claim for wage theft. In fact, waiting too long can cost you your case. The good news is federal law protects employees from being retaliated against for making claims for unpaid wages.
Where to Report Wage Theft
Wage theft victims can file a claim with the Wage and Hour Division of the federal Department of Labor with their state department of labor, or they can contact a wage theft lawyer for a free consultation and guidance through the entire process. A wage theft lawyer will help you collect evidence, file a lawsuit, and prove your case.
We Can Help
Have you been a victim of wage theft in New York. We can help. Failure to pay any of the wages that a worker has rightfully earned is both a breach of contract and a violation of minimum wage laws. Wage theft is a crime, and those who commit it should be prosecuted as such. Our team of experienced employment attorneys can help you build a strong case to get the compensation you are entitled to. Contact us today to learn more.
