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Study shows wage theft takes tremendous toll in U.S.

| Nov 21, 2019 | Employment Law |

Wage theft may not be at the top of our minds when we think about serious crimes in the United States. However, a report from the Economic Policy Institute (EPI) estimates millions of workers lose up to $16 billion a year in lost wages through illegal practices by their employers.

The EPI study says there are obvious ways some companies remove earnings from their workers’ pockets, but there are also many subtle and complicated methods they use. Some minimum-wage workers lose as much as $3,300 a year.

Who is affected?

Workers impacted by wage theft are employed in virtually every industry from fast-food restaurants to hospitals and financial institutions, while freelance workers are especially susceptible. Wage theft comes in many forms, including:

  • Refusing to pay workers the minimum wage
  • Not paying non-exempt workers overtime
  • Illegally deducting pay from their checks
  • Asking employees to work off-the-clock
  • Not allowing legally-mandated meal breaks
  • Not distributing pay stubs to workers
  • Confiscating tips and not making up the difference between tips and minimum wage
  • Misclassifying workers as independent contractors

Labor Department targets offenders

The U.S. Department of Labor has jurisdiction over enforcing wage laws, and last year set a record by returning $308 million of stolen wages to workers. However, there is still a lot of room for improvement to make up for the estimated $16 billion in lost wages.

Lower-income workers are frequently affected

Researchers say wage theft hurts low-wage workers more often when they are already the most vulnerable segment of the workforce. Research shows the targets are more likely to be women, non-white workers and those with less education. Employers should review and revise their practices and policies to meet federal wage standards to avoid fines and other penalties. Workers missing hard-earned pay can receive help from an experienced employment law attorney here in Massachusetts.