In the year 2012, federal and state agencies recovered $933 million for wage theft victims. Research conducted by the Economic Policy Institute estimated that workers in America lose $20 to $50 billion annually to employers who are not paying workers what they’re legally owed. That’s not a misprint. Wage theft can come in many different forms — not paying employees the federal, state, or local minimum wage, failing to pay overtime, or the dismissal of job promotions.
According to an article written by Jeff Spross for The Week, “[t]he Americans who get hit hardest by wage theft tend to be the most vulnerable workers with the least power: low-paid, often in service work, often racial minorities or part of marginalized social groups.”
Studies have shown that industries such as construction and education have lower rates of wage theft at 12 to 13 percent. Restaurants, grocery stores, and warehouses see rates between 20 and 25 percent; textile and clothes manufacturing near 40 percent; and child care workers dealt with minimum wage violations approaching 66 percent. 90 percent of industries in the country see violations regarding overtime pay.
As for race and gender, which play a significant role in unbalancing the workforce, wage violations towards women stood at higher rates than men and were observed at rates three times higher for blacks than whites (with violation rates even higher for Latinos). Workers at smaller businesses were more at risk for wage theft, as well as those who were less educated.
In 2015, Papa John’s hit the news headlines when a New York franchise owner was only sentenced to 60 days in jail for violating minimum wage and overtime laws. Papa John’s paid nearly $500,000 to resolve these wage theft claims. However, “[c]ompare that to the thousands of poor and non-white Americans who spend months, years, or even their entire lives in prison for petty theft or drug possession,” noted The Week. Since wage theft is treated as a civil matter and handled through fines, those individuals within huge companies may believe that they are exempt from the law.
The routine practice of wage theft has become far too prevalent and widespread, costing workers billions of dollars a year. This is detrimental to everyone, but can be disastrous for those living paycheck to paycheck.
Upholding Employee Rights
Lieff Cabraser has a strong tradition of fighting for employee rights across America. Our employment law class action cases challenge (a) discrimination based on employees’ race, color, national origin, religion, age, gender, sexual orientation, or disability; (b) wage violations, including failure to pay overtime, break time, or vacation time; and (c) misuse of employees’ retirement benefits. We also represent employees who “blow the whistle” on wrongdoing by their employers as well as in other cases alleging violations of the law.