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Wage Theft Is Increasing. What Can You Do?

Hands in handcuffs hold money
By Andrew Leonatti on September 10, 2020 9:00 AM

The economic pain caused by the coronavirus continues with no end in sight. Millions are out of work and struggling to make ends meet.

But another group of workers is also falling through the cracks: Those who are still working but not being paid what they are owed. A new report shows that the problem of wage theft is likely dramatically increasing during the pandemic, and the majority of the victims are those who can least afford it.

Defining Wage Theft

The definition of wage theft is a simple one: You do not receive the pay that the law or your contract entitles you to. Wage theft can come in many forms, including if your employer:

  • Fails to pay overtime
  • Withholds your final paycheck when you leave a job
  • Does not pay you your state or city's minimum wage
  • Withholds all pay, including paid sick time
  • Steals your tips

In short, when your employer hires you, they agree to comply with local, state, and federal laws regarding minimum wages, overtime, and any other pay that your employment agreement entitles you to.

A Growing Problem Due to COVID-19

A new report from the Washington Center for Equitable Growth tank shows how the pandemic is likely causing wage theft to become more widespread. The report examines the Great Recession of 2007-2009 and shows how wage theft dramatically increased at the same time that unemployment was rapidly rising.

While the unemployment rate was at a record low 3.5% in February, pandemic-related job losses caused it to skyrocket to 14.7% in April. While unemployment has fallen in recent months, it is still above 8%.

The report further found that any low-wage worker faced a 10-22% chance of being a victim of a minimum wage violation between 2007 and 2013. It also predicted the jobs where workers would be the most likely victims of wage theft this time around:

  • Food and drink service workers
  • Retail workers
  • Housekeepers and laundry service workers
  • Hotel workers
  • Nannies, babysitters, etc.
  • Transportation and warehouse workers

Workers who earn tips, such as servers, are especially vulnerable. Many states that have a tipped minimum wage require employers to make up the difference when tips fall so short that workers don't make the standard minimum wage, but many employers are failing to live up to their obligations.

Why Is This Happening?

It is obvious that many businesses are struggling to make the same amount of money that they did before the pandemic, especially restaurants. However, that does not excuse short-changing employees.

But many employers do because workers in the most at-risk professions often lack the leverage to change jobs, especially right now when it may be difficult to find other work. The report shows that women, Black, and Hispanic workers are at most risk in these situations. Workers who don't have U.S. citizenship are especially vulnerable.

In short, employers count on workers being too scared to say or do anything about withheld wages.

What Can You Do About Wage Theft?

You may be surprised to learn that wage theft costs victims far more than the victims of all other types of theft combined. But government regulators often rely on victims of wage theft to come forward and make complaints. And unlike robbery, where the police get involved, wage theft complaints are often investigated through the state's attorney general's office, and employers typically face civil penalties and fines instead of criminal consequences.

If you think you have been the victim of wage theft, the most important thing to know is that your employer cannot retaliate against you for speaking up. If they attempt to do so, the law is on your side.

If a complaint to your workplace's human resources department has not gotten you anywhere, you should consider talking to an employment lawyer about your rights.

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