What is Wage Theft? 

Wage theft refers to various unlawful actions employers take to deny employees their rightful earnings. These include unpaid overtime, where workers put in extra hours without receiving the required additional pay, and minimum wage violations, where employers pay less than the legally mandated rate. It can also involve unauthorized paycheck deductions, such as charging employees for uniforms or equipment. Recognizing these practices is essential for employees to identify when they are being underpaid.

Wage theft is not a simple mistake; it is a deliberate action that can deeply affect workers’ livelihoods. Examples include misclassifying employees as independent contractors to bypass paying benefits and overtime, requiring off-the-clock work without compensation, and unlawfully taking a share of employees’ tips in the service industry. Identifying these exploitative practices is the first step toward safeguarding your rights and earnings.

Examples

Wage theft takes many forms, all of which harm employees’ financial stability. A common example is misclassifying employees as independent contractors to avoid paying overtime or providing benefits, stripping workers of rightful earnings and legal protections. Off-the-clock work is another issue, where tasks performed outside paid hours—like setting up before shifts or cleaning up afterward—go unpaid.

Tip theft is prevalent in the service industry, with employers or managers unlawfully taking a share of employees’ tips, diminishing their income and undermining their efforts. Additionally, illegal paycheck deductions for uniforms, tools, or damages further reduce take-home pay and are often prohibited by law. Being aware of these practices is crucial for employees to recognize and address wage theft effectively.

Pay Stubs

To identify wage theft, start by carefully reviewing your pay stub for inaccuracies. Your pay stub should clearly detail hours worked, your hourly rate, overtime pay, and any deductions. Discrepancies—such as fewer recorded hours, incorrect pay rates, missing overtime, or unexplained deductions—may indicate wage theft. Understanding how to read your pay stub and what it should include is essential.

Regularly compare your pay stub with a personal record of your hours worked to spot and address issues early. If you notice discrepancies, report them to your employer right away. Additionally, familiarize yourself with your employer’s payroll policies to understand how your pay is calculated and ensure deductions are lawful. Staying vigilant about pay stub accuracy is a proactive way to protect your earnings and rights.

Unpaid Overtime

Unpaid overtime is a frequent form of wage theft that can significantly reduce your income. Under the Fair Labor Standards Act (FLSA), non-exempt employees are entitled to overtime pay—typically 1.5 times their regular hourly rate—for hours worked beyond 40 in a workweek. Warning signs include regularly working over 40 hours without a corresponding increase in your paycheck or being asked to perform tasks off the clock. You can calculate owed overtime by multiplying your extra hours by 1.5 times your regular pay rate.

If you suspect unpaid overtime, document all hours worked, including any off-the-clock tasks. This record can serve as evidence if you file a complaint or take legal action. Also, check your state’s overtime laws, as some offer stronger protections than federal guidelines. Addressing unpaid overtime quickly ensures you receive fair compensation and helps prevent ongoing violations.

Deductions

Unauthorized paycheck deductions can be a hidden but impactful form of wage theft. Employers may deduct costs for uniforms, tools, or work-related mistakes, but many of these deductions are not legally allowed. For example, deductions that reduce your pay below the minimum wage or those made without your written consent are typically unlawful. Understanding federal and state laws regarding permissible deductions is key to identifying potential issues.

To safeguard your earnings, regularly review your pay stubs to ensure all deductions are legitimate. If you spot unauthorized deductions, promptly bring them to your employer’s attention and request clarification. Knowing your rights can help you advocate for fair treatment, as employers must usually obtain written consent for non-standard deductions. Staying vigilant ensures you receive the full compensation you’re entitled to.

What Are Your Rights

Understanding the legal protections against wage theft is essential for employees. The Fair Labor Standards Act (FLSA) establishes federal standards for minimum wage, overtime pay, and record-keeping. Under the FLSA, non-exempt employees must earn at least $7.25 per hour and receive overtime pay at 1.5 times their regular rate for hours worked beyond 40 in a week. Many states, however, have their own wage and hour laws that provide stronger protections. For instance, California enforces a higher minimum wage and stricter overtime rules than federal law.

Knowing both federal and state labor laws is crucial for ensuring fair compensation. State laws may also offer additional rights, such as mandatory meal and rest breaks, which are not covered by federal regulations. Familiarizing yourself with these laws empowers you to recognize and address violations, helping you secure the pay you deserve

As an employee, you are entitled to rights that protect you from wage theft and ensure fair workplace treatment. These include the right to earn at least the minimum wage, overtime pay for hours worked beyond 40 in a week, and a detailed pay stub showing your earnings and deductions. You also have the right to report wage and hour violations without fear of retaliation, as employers are legally prohibited from retaliating against employees who file complaints or participate in investigations.

Understanding these rights is the first step in safeguarding yourself from wage theft. If you suspect a violation, you can file a complaint with the Department of Labor or your state labor agency, which will investigate your claims. If needed, you can also seek legal assistance to navigate the process or address employer retaliation. Being informed and proactive helps ensure you receive fair treatment and full compensation.

Seeking Legal Help

If you believe you’ve experienced wage theft or need guidance on your workplace rights, EmpLaw, LLP is here to support you. Our skilled employment attorneys are committed to defending workers’ rights and promoting fair workplace practices. Contact us today to schedule a consultation and begin the process of recovering the wages you deserve. Don’t let wage theft go unanswered—reach out to EmpLaw, LLP and let us help you achieve the justice you’re entitled to.