Wage theft is the most common workplace violation in America.
And its prevalence is growing. Every year, employers steal billions of dollars from workers through deceptive practices that most employees aren’t even aware of. One study found that 25% of fast food workers were paid less than minimum wage illegally in 2024.
That’s 1 in 4 workers being robbed blind.
The issue?
Most workers don’t know what wage theft is. They aren’t aware of their rights. And if they suspect theft is occurring, they certainly don’t know how to take action.
Fortunately, the law offers numerous protections to victimized workers. By learning about these common wage theft tactics, you can protect yourself and your employees while also fighting to recover lost wages.
You’ll learn:
- The Most Common Wage Theft Schemes
- Why Employers Feel They Can Get Away With It
- Laws Protecting Against Wage Theft
- Steps To Take If You Believe You’re a Victim
Understanding Wage Theft
Let’s start with the basics. What is wage theft?
In its simplest form, wage theft occurs when an employer doesn’t pay an employee what is owed to them.
Sounds simple enough, right? Well, there’s a lot more that goes into it than you might think.
Wage theft can come in many shapes and forms. Some are blatant. While others can be so discreet that employees don’t realize they’re being robbed until years down the line. If employees are dealing with wage violations as well as workplace harassment, they can reach out to a workplace harassment lawyer or North Carolina Employment Lawyer to learn more about their options.
Examples of wage theft include:
- Being denied overtime pay
- Minimum wage violations
- Required to work “off the clock”
- Illegal tip stealings
- Employee misclassification
The Department of Labor recovered $273 million in back wages on behalf of nearly 152,000 American workers in 2024. But that’s only a fraction of the billions stolen every year.
Most Common Wage Theft Offenses
There are plenty of ways employers steal from their workers. Some knowingly. Some may not even know that what they’re doing is illegal.
Regardless of why it’s happening.
They’re still stealing from you.
Below are a few of the most common wage theft methods employers use.
Withholding Overtime Pay
This is the most common form of wage theft.
In the United States, employers must pay workers overtime (1.5 times their normal wage) for any hours worked over 40 in one week. Many employers know this. They simply don’t follow it.
Overtime violations can include:
- Calculating hours worked over multiple weeks instead of per week
- Classifying employees as “exempt” from overtime when they don’t meet the criteria
- Making employees work through unpaid lunch breaks
- Expecting employees to check emails and take calls after hours
Denying Minimum Wage
The Federal minimum wage is $7.25 an hour. But states can be higher. Regardless of which minimum you’re entitled to, employers find ways to cheat you out of it.
One way is by illegally deducting money from your paycheck. Whether it’s for a uniform, equipment, or a cash register shortfall… these deductions effectively lower your hourly wage below minimum wage.
Tipped employees have it even worse. Employers are allowed to pay as little as $2.13 per hour if your tips “make up the difference.” But when sales are slow, and tips don’t reach that magic number… employers are required to make up the difference. They often won’t.
Misclassifying Employees
Employee misclassification has been on the rise as of late.
Employers love to classify workers as “Independent Contractors” instead of employees. That way, they don’t have to pay minimum wage or overtime. They don’t have to provide Unemployment Insurance or workers comp. And the worker is denied all those benefits and protections at law.
But when does someone qualify as an Independent Contractor?
Someone who works for a company is generally considered an employee. Period.
If the company you work for dictates when, where, and how you’ll do your job… they owe you minimum wage, overtime, and other benefits regardless of what your “contract” says.
Legal Protections For Workers
Thankfully, employees have quite a few legal protections when it comes to wage theft. Below are some of the ways the law can fight back for you.
Fair Labor Standards Act
The FLSA is a Federal law that created the minimum wage, overtime pay, and other employment standards.
If an employer violates the FLSA, workers can file a complaint with the Department of Labor’s Wage and Hour division. The Department will launch an investigation (during which they will review your employer’s records and interview other employees). If they find your employer did indeed steal from you, they will demand your employer pay your lost wages. Sometimes even more.
State Laws
Many states have labor laws that are even more extensive than the FLSA.
Many states allow workers to triple (or even quadruple) their recoverable damages if they can prove the employer knowingly violated wage laws. Some states will even criminally prosecute repeat offenders.
Private Lawsuits
Workers can sue their employers in court.
Under the FLSA, winners of these lawsuits can recover their unpaid wages PLUS another amount equal to that sum as “liquidated damages.” Lawyers’ fees are normally included as well. Meaning, if you win the case… the employer pays your attorney.
Workers can also file Class Action Lawsuits against their employers. If a large group of workers have been affected by the same wage violations, they can band together and sue as a group. Oftentimes these classes of employees can win millions in settlements.
Next Steps For Workers
Think your employer is stealing from you? Don’t wait to take action.
Start keeping records. Maintain your own personal records of your scheduled hours, hours worked, and pay received. Ask for any company policies on pay and scheduling in writing. Don’t trust your employer to have your back.
Know your rights. Learn about both Federal and state wage laws. Read up on what you should be paid under your specific circumstances.
File a complaint. Report your employer to the Department of Labor or your state labor department. Filing these complaints is free, and they can launch an investigation into your employer.
Seek legal counsel. While you can certainly represent yourself, an employment attorney can advise you on your rights and help you protect yourself moving forward. Most attorneys offer free consultations, and will only get paid if you win your case.
Wrapping Things Up
Wage theft is a pervasive issue that impacts millions of American workers each year.
Employers shy-cut overtime rules, minimum wage laws, and fair classification standards to steal billions of dollars from their workers.
But workers have rights, and there are laws to protect you.
If you believe your employer has violated your rights, take action now. File a complaint. Speak to an attorney. And hold your employer accountable.
You work hard for your money. Don’t let unscrupulous employers take it from you.
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