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Examples of wage and hour theft

On Behalf of | May 13, 2024 | Employment Law |

Most employers are upfront with their employees and pay them what they are due – but there are always going to be companies that focus on their bottom lines so hard that they are willing to cheat their employees out of their wages in both big and small ways.

Wage and hour theft is a pervasive issue that affects millions of workers worldwide, depriving them of their hard-earned wages and basic employment rights. According to the Economic Policy Institute, wage theft costs U.S. employees about $50 billion per year – and workers don’t even realize that they’re being cheated. 

How does wage and hour theft happen?

It’s important to remember that these violations can occur in various industries and at all levels of employment (although the lowest-paid workers are often the most impacted). Some common examples include:

  1. Minimum wage violations: Employers sometimes pay their most disadvantaged workers “under the table” to avoid paying them minimum wage or giving them benefits.
  2. Misclassification of employees: This is where an employer labels an employee as an independent contractor or exempt employee to avoid paying minimum wage, overtime or other benefits.
  3. Tip theft: This is particularly prevalent in the hospitality and service sectors. In California, the law says that tips belong solely to the employee or employees from whom the money was left – never the employer. This means tip pooling is limited, and tips cannot be used as a credit toward the employer’s minimum wage obligation. In addition, employers are required to cover the credit card fees on tips paid with credit.
  4. Off-the-clock work: Some employers (especially in food service and hospitality) will pressure workers to clock out and keep working until the work is all caught up – and they’re equally likely to put an employee to work before they actually clock in. Those minutes and hours add up over time.

While there are plenty of other examples, these give you an idea of how wage and hour violations occur – and how they undermine the rights of workers and perpetuate economic struggles among low-paid workers. By taking proactive steps to address the situation you’re facing, you can hold an employer accountable for their actions.

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