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Workers in the United States have numerous rights and protections when it comes to how much they get paid. There are federal as well as state wage and hour laws that ensure fair pay based on current labor standards. However, many employers violate these laws and take advantage of employees to save money; they choose to protect their profits over their workers. Looking at the most recent U.S. wage theft statistics can illuminate this problem.
Wage theft refers to when an employer steals wages that are lawfully owed to their workers. Under state labor laws as well as the Fair Labor Standards Act, employers are required to pay minimum wage. They are also required to pay one and one-half times a worker’s hourly wage in overtime pay for every hour worked over 40 hours in a single week. If an employer violates any of these laws and underpays a worker, it is wage theft.
Wage theft can take many forms, such as:
Wage theft can occur intentionally or negligently. An employer may knowingly pay an employee less than the law requires in an attempt to increase the company’s bottom line. In other cases, an employer may fail to do its due diligence to understand and obey the wage and hour laws that apply to its workers – resulting in accidental wage theft. Either way, the wronged employee is a victim of wage theft and has the right to take a stand against this type of fraud.
It is estimated that millions of workers are victims of wage theft each year in the U.S. A study by the Economic Policy Institute in 2021 found that from 2017 to 2020, more than $3 billion in stolen wages were recovered by the U.S. Department of Labor. This staggering amount is only what was recovered for workers – it does not include the stolen wages that were not recovered. Reports find that the $3 billion is only a small percentage of what is stolen annually from workers by employers.
According to the U.S. Department of Labor Wage and Hour Division, more than $230 million was recovered in total back wages for over 190,000 wronged workers in 2021. Over $34.7 million was recovered in the food service industry, $36 million in construction, $13.8 million in healthcare, $13.4 million in retail, $8.4 million in agriculture and $6 million in guard services.
A Rutgers report on wage theft in the U.S. states that while the prevalence of wage theft is difficult to estimate, it is more widespread in low-wage industries. An estimated 17 percent of low-wage workers suffer minimum wage violations, resulting in around $8 billion stolen from them per year.
This report states that the estimated amount of stolen wages is more than money lost due to robbery, theft, larceny and vehicle theft combined. In addition, wage theft appears to happen more often to minorities. The Wage Justice Center reports that women and workers of color face higher rates of wage theft than other workers.
Wage theft is rampant in the United States. While there is no accurate way to gauge exactly how much is being stolen from workers, every year, estimates place it in the billions of dollars. If you believe you are a victim of wage theft, you may be entitled to financial compensation through a civil lawsuit brought against your employer. Contact an attorney who specializes in wage and hour claims in Ohio for assistance. Your lawyer can help you understand your rights and go up against your employer in pursuit of back pay and other compensation for stolen wages.