What is Wage Theft?

Molly Tefend , December 13, 2017

Wage Theft remains a serious problem in the United States. The majority of wage theft violations are due to businesses failing to pay minimum wage. Other examples of wage theft include employees who have their tips stolen, those who work “under the table” or off the books, and employees who are forced to clock out and continue working—and these are merely a few examples.

A $50 Billion Issue
Approximately $50 billion dollars in wages are stolen by U.S. employers nationwide every year. That number is enough to provide 1.2 million people with employment and pay them $20 per hour. In comparison, the combined robberies, motor vehicle thefts, larcenies, and burglaries added up to less than $14 billion in 2012.  States, along with the Federal Department of Labor, recovered approximately $933 million in stolen wages that same year, which was less than 2 percent of what was taken from hard-working employees.

More Grim Statistics
An estimated 83 percent of workers who win their wage theft cases do not see a single penny. According to the 2017 Wage Theft Report, the average weekly earnings of a U.S. employee is $339, of which $51 is stolen. This comes to a total of $2,634 out of $17,616 annual earnings. A study focusing on low-wage industry workers in New York, Chicago, and Los Angeles found at least two-thirds of these employees dealt with at least one pay violation.

Wage Theft Hurts Women, Immigrants, & Latin Americans the Most
Statistics show that immigrants, women, and Latin Americans get hit the hardest of those suffering from wage theft. Over 30 percent of women have their wages stolen compared to less than 20 percent of men, while Latin American citizens lose over 30 percent more than Asian and white people. More than 30 percent of foreign workers also report stolen wages, in comparison to less than 15 percent of U.S.-born workers.

Fighting Wage Theft
Thankfully, people are fighting the war against wage theft. New York has the strongest anti-wage theft laws in the country, while state attorney generals in 45 states have recovered $14 million in wages back for workers. Private attorneys won $467 million in wage theft class-action suits, and the U.S. Department of Labor recovered $280 million. State departments of labor in 44 states took back $172 million in stolen wages.

Wage and labor laws need to be stronger than ever to get rid of this problem permanently. Will adjudication be enough to slow down or prevent this unjustifiable practice in the future? It’s unlikely, but authorities are doing what they can to at least catch some of the violations. Read the full report here.

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