Benefits and Compensation

Is Your Company Guilty of Wage Theft?

Companies tend to focus on messaging that targets management, ignoring information employees and job seekers receive from various sources. After all, there are only so many hours in a day.

However, a new message aimed at the workforce should have management at all companies on high alert.

Fighting for Fair Pay

The message comes from The Wage Authority Group, a group of attorneys who are dedicated to educating U.S. workers about wage and overtime laws and championing employees’ right to fair pay.
The law firm’s website, Owed Unpaid Wages, includes a phone number, an online form, and live chat. Workers visiting the site will also find information about the Fair Labor Standards Act (FLSA), minimum wage, employment status, and more.
Companies should visit the site, and view it through the eyes of an employee.

New Report

But that’s not all. The Wage Authority Group recently released a report that shows wage theft costs workers $50 billion annually.
According to the report, all the robberies, burglaries, larcenies, and motor vehicles thefts in the nation cost their victims less than $14 billion in 2012—which is only a third of the estimated cost of wage theft nationwide.
“The prevalence of wage theft in our country is shameful. No employer has the right to cheat workers out of their hard-earned money. Every working person deserves to be paid fairly and fully for their labor,” said Jason Thompson, an attorney from The Wage Authority Group, when releasing report findings.
“Unfortunately, these workers’ lives are often made significantly harder when they work for employers who fail to properly compensate them for the hours worked by illegally taking paycheck deductions, forcing them to work off the books, etc.”
The firm points out that in 2012, federal and state departments of labor and lawyers recovered at least $933 million in wages, which is less than 2 percent of the amount estimated stolen.
It also cites a three-city (New York, Chicago, and Los Angeles) study that finds in any given week two-thirds of workers in low-wage industries experience at least one pay-related violation. The vast majority of wage theft violations in Los Angeles – nearly 55 percent – are due to failure to pay minimum wage.
“More often than not, women, immigrants, and people of color are typically hit hardest by wage theft as our report reveals,” said Thompson. “At the end of the day, stealing the pay of workers—no matter who they are—is morally wrong. It’s food off their tables and makes it extremely challenging for them to provide for their families.”

Putting Employers on Notice

The Wage Authority Group assists workers, but it also aims to influence U.S. business practices.
“When a business fails to abide by the federal Fair Labor Standards Act (FLSA) as well as state and local employment statutes, they risk some pretty big penalties and can be forced to pay some hefty fines,” said Thompson.
The firm points out that when companies violate the FLSA or state and local employment laws, workers have the right to sue for unpaid overtime and other compensation. This can often be done as a class action lawsuit, where workers take collective action against their employer.
The message for companies is to review all policies and practices related to employee pay—and to ensure that these policies and practices are given proper attention when recruiting and hiring.

Paula Paula Santonocito, Contributing Editor for Recruiting Daily Advisor, is a business journalist specializing in employment issues. She is the author of more than 1,000 articles on a wide range of human resource and career topics, with an emphasis on recruiting and hiring. Her articles have been featured in many global and domestic publications and information outlets, referenced in academic and legal publications as well as books, and translated into several languages.

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