As an employer are you engaging in wage theft?

by Michael Haberman on September 26, 2017 · 1 comment


Employers are accused of stealing $50 billion in wages annually.

An organization called the Wage Authority Group released a recent report saying that employers are stealing up to $50 billion annually from workers. This dwarfs the $14 billion stolen from people through robberies, burglaries, larcenies, and motor vehicle thefts in the nation. That is a tremendous number. As they calculate fifty billion a year is enough to provide over 1.2 million people with jobs — and pay them $20 an Hour. So what do they consider wage theft?

What is wage theft?

Wage theft can take many forms according to the Wage Authority Group. The methods they include:

  • Not paying the minimum wage- This happens in areas with heavy Hispanic populations. It also happens more frequently to women workers that it does male workers.
  • Working off the clock.
  • Clocking out early but forced to continue to work.
  • Tips being stolen.
  • Not being given rest or meal breaks.
  • Illegal deductions are taken from paychecks.

The Wage Authority Group presents these as acts of commission, acts were employers know what they are doing and are purposely violating the law. Employers do indeed steal from employees, as I have detailed in the past. See here for an example. Employers in this category do need to be punished. Indeed for some of them, jail time might be the appropriate punishment. Employers who take advantage of immigrants are two-fold violaters. They should not have hired them in the first place if they did not have the legal status to work in the U.S., and then they should not have paid them incorrectly because the worker fears deportation.

Omission

My experience has been that most wage errors made are done by mistake. They are done because of the lack of knowledge about the Fair Labor Standards Act (FLSA) and state laws governing how people are to be paid. There is no excuse for not knowing what the minimum wage is, but there can be some confusion on whether the person is eligible to be paid a “training wage” for a period of time, that is below the standard minimum wage.

Another mistake frequently made is in the payment of overtime. Many employers miscalculate overtime because they are using a base rate and not the regular rate of pay. According to Fact Sheet #23 the regular rate of pay “… includes all remuneration for employment except certain payments excluded by the Act itself.” But what are those exceptions? Most employers don’t know, so they make mistakes.

There are many more examples like this that are beyond the scope of this blog post. My point is that much of the theft that employers are accused of is due to lack of knowledge and not purposeful action. Unfortunately, THAT MAKES NO DIFFERENCE! Money is still owed and fines can still be levied.

Don’t be a wage thief

Educate yourself on the provisions of the FLSA. Don’t be one of those employers that get written up in the paper or the DOL press releases.

By the way, sadly 83% of employees who win their wage and hour lawsuits never see any money.


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{ 1 comment… read it below or add one }

Sumit September 27, 2017 at 6:37 am

Great Post. Keep it up. For more blog about employer engagement click here: https://www.thecareermuse.co.in/employers/employee-engagement/

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