Wage theft bleeding workers dry

Wage theft steals money from workers like a fox in a hen house. Image from Wikimedia Commons.

Aside from the already unpleasant business of working for not a lot of money, low-wage workers have also have to worry about wage theft. Wage theft is where employers don’t pay their employees at all, too little or stiff them on overtime, which is more common than some might think.

Susceptible to stolen wages

Lower-wage workers unfortunately face a higher risk of wage theft. Wage theft is the theft of wages by an employer, by design or accident. It can mean the omission of hours worked, pay at less than the worker’s wage or the federal minimum wage or an employer denying a worker wages earned while working overtime hours, which is mandated by law.

A 2009 study by researchers from UCLA and City University of New York, according to the New York Times, polled 4,387 low wage earners in various cities, finding 68 percent had experienced a wage violation in the previous week. Of those surveyed, 26 percent were paid less than minimum wage; 76 percent weren’t paid for overtime.

The average violation amounted to a 15 percent pay cut, costing an average $51 from weekly wages $339. The average hourly wage in the study was $8.02.

Far too common

According to a 2009 USA Today article, complaints of wage theft have increased in recent years as more employers seem to be helping themselves to cash advance from employees’ pay. In 2008, the Department of Labor recovered wages for more than 77,000 workers, amounting to $57.5 million. The DOL recovered $52.7 million in 2007.

Unpaid overtime is a common infraction. Walmart, according to USA Today, recently settled a class-action lawsuit brought by employees in 2007 over unpaid overtime hours, agreeing to pay $4.8 million in back wages and damages. Federal courts, according to CNN, noted more than 7,000 cases were pending concerning unpaid wages and overtime in 2011, a 400 percent increase from 2001.

Not paying overtime is a violation of the Fair Labor Standards Act, the law employees sue employers under for not paying overtime hours. Forcing employees to continue working off the clock is as well.

More than $1 billion annually was being paid by various companies to settle wage and hour suits as of 2007, according to a 2007 Bloomberg article posted on MSNBC. Walmart is a common defendant in wage and hour suits. In 2007, there were 80 pending against the retail giant, the bulk of them for off-the-clock hours violations.

Losses unknown but staggering

It isn’t known how much is lost to wage theft, but it is likely substantial. According to the Huffington Post, low-wage workers in New York are estimated to lose $3 billion per year. Low-wage workers in Houston, Texas, according to the Myrtle Beach Online, lose $753 million per year to wage theft. The state of California, according to the San Francisco Chronicle, is estimated to lose up to $7 billion per year in wage thefts.

Employees shouldn’t stand for it. The best thing to do is to document hours worked, overtime and otherwise. If a disparity occurs, discuss it with the employer first. However, if nothing is done, report it to state authorities or seek legal counsel.