Common types of wage theft

Federal labor laws exist to ensure that employees are treated - and paid - fairly for the important work that they do. Employers are required by law to pay certain wages, provide certain benefits and keep proper records of the time employees work, compensating them appropriately.

However, many employers violate these laws without scruples, cutting corners to save money and increase their bottom line. A variety of practices that are commonly called "wage theft" are used to shortchange employees. Worst of all, these offenses often go unreported.

Wage theft comes in many forms. Some of the more common types are:

  • Minimum wage violations occur when an employer fails to pay employees the minimum legal hourly wage. Currently the federal minimum wage is $7.25 per hour but California law requires employers to pay $8.00 per hour effective Jan. 1. Employees who rely on tips for their income must be paid $2.13 per hour according to federal law.
  • Overtime violations occur when an employer fails to pay nonexempt employees overtime for any hours worked above 40 per week. Some employers require employees to do more work than can reasonably be completed in 40 hours, which can prompt employees to work more than 40 and not report the extra time. Those expectations are a form of wage theft by the employer.
  • It is also illegal to misclassify employees as independent contractors to avoid providing them certain benefits. The Department of Labor has been cracking down on such misclassification in recent years.
  • Some employers engage in practices that deny tipped employees the full amount of tips that they earn. This is particularly troubling because tipped employees are often paid significantly less than other employees and rely on those tips for their livelihood.

If you have been a victim of wage theft, it is wise to speak with an experienced employment law attorney who can protect your rights and help you take appropriate legal action.

Source: American Public Media, "Robbed on the job: Advice on fighting wage theft," Jan. 4, 2013

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