What is Wage Theft?
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What is wage theft? Do you know the different ways in which wage theft can occur in the workplace? A knowledgeable employment lawyer, like the ones at Lawyers for Justice, PC have a strong legal strategy to ensure victims of wage theft are compensated fairly.
The definition of wage theft is when employers do not pay their employees for work they have completed. In theory, if an employer puts an employee to work and does not pay them for their time, they are stealing that person’s time and costing them money they would have otherwise been paid. This is where an employment lawyer can help.
Wage Theft Statistics
Wage theft statistics regarding minimum wage, stolen wages, overtime pay, federal minimum wage, labor law violations, and the amount of wage theft cases – especially in California – are constantly evolving. However, the following offer a general outline of wage theft statistics to keep in mind for California workers.
- Prevalence of Wage Theft: Wage theft is a significant issue in the United States. According to a report by the Economic Policy Institute, wage theft violations from workers is estimated to be over $50 billion annually across the country.
- Low-Wage Workers: Wage theft affects low-wage workers, and those who earn minimum wage, the most. A study by the National Employment Law Project found that 26 percent of minimum wage workers and low-wage workers were paid less than the legally required minimum wage.
- Unpaid Overtime: The Economic Policy Institute estimates that employers steal billions of dollars in unpaid overtime pay from workers every year. Many employees work overtime hours without receiving the appropriate overtime pay. These wage theft examples are ones that the attorneys at Lawyers for Justice, PC fight every day. The employment lawyers at the firm had recovered over $1 million for workplace violations like wage theft.
- Misclassification of Employees: Employee misclassification, where employees are wrongly classified as independent contractors, is also form of wage theft. As of 2021, the U.S. Department of Labor estimates that up to 30% of employers misclassify their employees.
- Restaurant Industry: Wage theft is especially prevalent in the restaurant industry because many employees work for tips. A survey conducted by the Restaurant Opportunities Centers United found that 84% of restaurant workers reported experiencing at least one form of wage theft.
- Impact on Immigrant Workers: Immigrant workers often face a higher risk of wage theft due to language barriers, fear of retaliation/being fired, and lack of knowledge about their labor standards rights. Immigrant workers are at a higher risk for wage theft compared to the general population.
- Enforcement and Recovery: The recovery of stolen wages can be challenging. However, working with a wage and hour lawyer who fights against wage theft and minimum wage violations can be an asset. An experienced employment lawyer, like the ones working at Lawyers for Justice, PC have years of experience fighting wage theft cases.
- Underreporting of Wage Theft: Wage theft is significantly underreported. Many workers are afraid of retaliation or losing their jobs, which often prevents them from reporting wage theft incidents.
For the most current and detailed wage theft statistics, it’s recommended to refer to reputable sources such as government agencies (e.g., U.S. Department of Labor), research organizations (e.g., Economic Policy Institute), or advocacy groups focused on workers’ rights.
Salaried Workers Rights
In California, salaried workers enjoy wage and hour division protections under the state’s labor laws. However, misunderstandings or misclassifications can sometimes lead to wage theft. Here’s what salaried employees should know about their rights and what constitutes wage theft.
Understanding Salaried Worker Classification
California law divides employees into exempt and non-exempt categories. While salaried workers are often classified as exempt, this is not automatic. To be considered exempt, employees must:
- Earn a monthly salary equivalent to at least twice the state minimum wage for full-time employment (ex: $64,480 annually for employers with 26+ employees in 2024).
- Perform specific job duties that align with executive, administrative, or professional roles under California’s Industrial Welfare Commission (IWC) orders.
Non-exempt salaried employees are entitled to overtime pay, meal and rest breaks, and other protections similar to hourly workers. Misclassification of employees as exempt when they do not meet these criteria can lead to wage theft claims.
Examples of Wage Theft for Salaried Employees
Wage theft can happen in many ways, even for salaried employees. Common examples include:
- Unpaid Overtime: Exempt employees cannot claim overtime, but non-exempt salaried workers must be paid 1.5 times their hourly equivalent for hours over 8 in a day or 40 in a week. Misclassifying employees as exempt can unlawfully deny them this compensation.
- Off-the-Clock Work: Employers cannot require or allow non-exempt employees to work outside regular hours without pay.
- Improper Deductions: Employers cannot deduct pay for partial workdays from exempt employees’ salaries, as this violates California’s salary basis rules.
- Failure to Reimburse Work Expenses: Under Labor Code Section 2802, employers must reimburse all necessary expenses, such as mileage or remote work costs, incurred by employees while performing their job duties.
Legal Remedies for Wage Theft
If a salaried worker experiences wage theft, they reach out to Lawyers for Justice, PC to see if they should pursue a lawsuit. Potential remedies for a lawsuit could include unpaid wages, overtime, penalties for meal and rest break violations, and reimbursement for expenses.
Salaried employees in California should review their job classification, salary, and duties to ensure compliance with the law. Understanding these rights can help employees recognize wage theft and take action when necessary. Consulting an employment attorney is an excellent step for resolving disputes and recovering owed wages.
California Wage Claim Penalties
California labor laws provide strong protections for employees who are not paid correctly. When employers fail to meet wage payment obligations, they may face significant penalties. Understanding these penalties can help employees recover what they are owed and hold employers accountable in a wage theft case.
Waiting Time Penalties
If an employer does not provide a final paycheck on time after an employee’s separation, the employer may owe waiting time penalties under Labor Code Section 203. These penalties equal the employee’s daily rate of pay for each day the payment is late, up to 30 days.
For example, if an employee earning $200 per day waits 15 days for their final paycheck, the employer could owe $3,000 in penalties.
Meal and Rest Break Violations
If an employer fails to provide legally required meal or rest breaks, employees are entitled to one additional hour of pay at their regular rate for each missed break. These penalties can quickly accumulate if a pay-related violation occurs frequently.
Wage Statement Penalties
Employers must provide accurate, itemized wage statements. Under Labor Code Section 226, employees can recover penalties if wage statements are incorrect or incomplete. Penalties include $50 for the first violation and $100 for subsequent violations, usually up to $4,000.
Unpaid Wages and Liquidated Damages
For unpaid wages, employees can recover the full amount owed plus unpaid wages if the employer acted in bad faith.
Is Wage Theft Illegal? – FAQ
is wage theft a felony? In 2021, Assembly Bill 1003 was passed to amend California law in that wage theft exceeding $950 could be prosecuted as grand theft, which may be charged as a felony.
how to file a wage claim in california? If any employee suspects their boss of stealing money, or making illegal deductions that constitutes wage theft, they should contact the powerhouse employment attorneys at Lawyers for Justice, PC (LFJ), for a free consultation so they can help them achieve justice.
how to win a wage claim in california? Having an experienced employment lawyer on the side of the victim is a surefire way to win a wage theft claim in California.
how to report wage theft? In addition to speaking with a lawyer, an employee can file a report with the Labor Commissioner’s Office by calling (213) 620-6330 or by visiting the California Department of Industrial Relations.
is wage theft a crime? Yes, wage theft is a crime under Penal Code 487m PC. The law protects employees from employers who fail to pay lawful wages.
is it illegal to pay less than minimum wage in california? Most employees in California must be paid at least the minimum wage per hour. An independent contractor may have a different rate.
can you sue for wage theft? Workers in California have the right to file a wage claim if their employers do not pay them the wages they are owed.
how common is wage theft? According to CalMatters, in 2020, the Legislative Analyst’s Office reported workers were filing 30,000 claims a year on average, totalling more than $320 million annually.
Call the employment lawyers at Lawyers for Justice, PC today so they can fight for your rights against wage theft.
Contact us if you think your employer is denying you your rightful pay. Call 818-647-9323 or visit us at www.CallJustice.com.