Wage theft is the term used to describe the common workplace practice of not paying workers all the wages they earn. The U.S. Department of Labor (DOL) has found these violations in more than half of the businesses they have investigated in entire industries such as construction, garment assembly, poultry processing, and retail. Among workers in low-wage industries in New York, Chicago, and Los Angeles, during a single week, over two-thirds were victims of wage theft. Nationwide, millions of workers each week, particularly those in low-wage jobs, suffer the theft of their wages by unscrupulous employers.
Wage theft refers to a number of a number of activities done by employers that, illegally, deprive workers of wages earned. These activities include:
- violations of minimum wage laws;
- non-payment of time-and-a-half overtime pay;
- workers being forced to work off the clock;
- workers not receiving their final paychecks when they end a job;
- workers having their tips stolen by management;
- workers mis-classifed as independent contractors instead of employees to enable employers to avoid paying minimum wages, overtime, and the employer share of payroll taxes, workers compensation insurance, and benefits; and
- in some egregious cases, workers are not paid at all, even after putting in hundreds or even thousands of hours of work.
Wage theft is a far bigger problem than bank robberies, convenience store robberies, street and highway robberies, and gas station robberies combined. In 2012, the Department of Labor recovered $280 million in back pay for 308,000 workers, money that had been stolen by wage theft. That amount – a small fraction of the total wage theft nationwide – far exceeded the total lost to criminals in street and highway, bank, gas station and convenience store robberies in 2012. The U.S. Department of Labor is the one agency that brings substantial resources to the effort to prevent and remedy wage theft, but its total staff of wage and hour investigators, about 1100 in all, is responsible for securing compliance from more than seven million employers. This means enforcement is completely inadequate. More.
What Can Be Done
1. Diligent law enforcement by the U.S. Department of Labor (DOL) and state Departments of Labor is needed to increase enforcement.
2. National legislation is needed to strengthen protection of workers and enhance enforcement.
3. State and local legislation is needed to prohibit wage theft and strengthen protections against payroll fraud.
4. National legislation is needed to strengthen the universally-recognized right of workers to form or join a union; unions in the workplace are one of the best deterrents against wage theft.
5. Strengthen community worker centers (over 200 have formed in the past decade) to help workers build their own power to recover wages and organize improvements in the workplace.
Get Involved to Stop Wage Theft
1. Educate yourself and your congregation using the resources below and others.
2. Volunteer with a worker center or religion-labor organization near you.
• Find a Worker Justice Group near you
• Find an Interfaith Worker Justice affiliated group
• Find a Jobs with Justice group
3. Support national, state, and local legislation to strengthen enforcement and penalties for wage theft.
4. Work to end wage theft in your community. See Winning Wage Justice: An Advocate’s Guide to State and City Policies to Fight Wage Theft [1.11 MB] from the National Employment Law Project.
• Interfaith Worker Justice webpage on wage theft and IWJ's Introduction to Wage Theft
• Read and discuss Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid And What We Can Do About It by Kim Bobo.
• See Stopping wage theft, an interview with Kim Bobo, author of Wage Theft in America: Why Millions of Working Americans Are Not Getting Paid And What We Can Do About It and executive director of Interfaith Worker Justice.
• Read Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America's Cities [1.1MB] by Annette Bernhardt and others. Researchers interviewed a representative sample of over 4,300 workers in low-wage industries in Chicago, Los Angeles, and New York City. More than two-thirds (68%) experienced wage theft during the previous work week, for example, 26% of workers were paid less than the legally required minimum wage and of the one-quarter of all the workers who worked overtime, 76% were not paid the legally-required overtime pay rate.