What is wage theft?
Wage theft covers a variety of infractions that occur when workers do not receive their legally or contractually promised wages.
Common forms of wage theft are non-payment of overtime, not giving workers their last paycheck after a worker leaves a job, not paying for all the hours worked, not paying minimum wage, and even not paying a worker at all.
What laws are broken in wage theft cases?
Most commonly wage theft is a violation of the Fair Labor Standards Act (FLSA), which provides for a federal minimum wage and allows states to set their own (higher) minimum wage, and requires employers to pay time and a half for all hours worked above 40 hours per week.
Under the Davis-Bacon Act, workers being paid by a contractor or subcontractor of a federal government contract are entitled to receive the prevailing wage for that work in the city or region of the U.S. where the work is done. Prevailing wages, which are calculated by the US Department of Labor, are higher than minimum wage. Many federal contractors simply ignore this law.
Wage theft may also involve violations of tax laws, through misclassification of employees as independent contractors. When a worker is called an independent contractor, the employer does not pay their share of federal taxes.
In what types of workplace or industry does wage theft occur?
Wage theft is endemic, and no group of workers is immune, including workers earning good wages. It is more likely to occur in non-union workplaces. Union workers generally receive pay according to their negotiated contract, and any wage theft would be challenged by the union.
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