A new survey from the Economic Policy Institute (EPI) estimates that wage theft (the failure to pay what workers are legally entitled to) in the United States costs workers over $50 billion dollars every year. These missing wages are the result of employers not paying workers for time spent working or for not paying overtime.
The EPI researchers discovered that during any week, about 67% of low-wage workers in Los Angeles, Chicago, and New York experienced a form of wage theft. The average worker in these three cities would about 15% of their earnings $2,634, to wage theft. Wage theft can occur when an employer requires its workers to do prep work before clocking in or cleanup work after clocking out, or when an employee is not given proper breaks throughout his or her shift. In just L.A., Chicago, and New York, the wage theft totaled nearly $3 billion in 2012.
While the $50 billion is just an estimate, in 2012, at minimum $933 million was recovered for the victims of wage theft. Employment law attorneys recovered $467 million in wage and hour lawsuits, the US Department of Labor recovered $280 million from businesses violating wage and hour laws, and individual states recovered $186 million. The extent of prosecuted wage theft in the United States appears to barely scratch the surface of EPI estimates.
In California, for example, EPI details the legal case against a car wash owner.
The list of violations by these eight businesses was extensive. Workers were required to wait on standby hours before their shifts began in case additional staffing was necessary, with no additional pay. The car washes frequently paid employees subminimum wages, failed to pay for overtime, and did not allow breaks. Those who quit or were fired never received their final wages. Moreover, workers were often unable to cash their paychecks due to insufficient funds in the company bank account.
California settled the case against the car wash owner for $1 million.
See the EPI report on wage theft here.
If you or a loved one believes that your employer is committing wage theft, contact The Law Offices of Larry H. Parker today at (800) 333-0000 for a free consultation. You may be entitled to compensation.
