Category: Wage and Hour Disputes

One of the issues with wage theft is that it may take many different forms. Some are evident, while others are more difficult to discern. Broadly, wage theft occurs when your company fails to pay you, the employee, what you are owed. It is sometimes obvious, such as when an employer fails to pay overtime and instead pays the regular rate of pay. Unfortunately, wage theft may be difficult for employees to detect, and tens or hundreds of employees might be robbed of their hard work and labor. From 2017 to 2020, a total of $3 billion in stolen wages was recovered, which is only a fraction of the full cost of wage theft. 

What is Wage Theft?

Wage theft is a relatively recent word that refers to a set of employer activities that result in workers not getting the pay to which they are legally entitled. The word recognizes that when employees are not paid the minimum wage or overtime, their employers are committing a manner of theft.

Common Forms of Wage Theft

• Overtime

The Fair Labor Standards Act (FLSA) stipulates that employees are entitled to overtime compensation. Independent contractors and exempt workers are the only two exemptions. Exempt workers are employees paid a salary above the minimum weekly requirement. Non-exempt employees are eligible for overtime compensation when their workweek exceeds 40 hours. Employers that violate this are guilty of wage theft.

• Illegal Deductions

The vast majority of businesses deduct the salary as compensation for employees who violate company policies. On the other hand, some do this for little or invented offenses. When these deductions add up to a total figure lower than the minimum wage, the employer may be accused of committing wage theft.

• Minimum Wage

The bare minimum amount that an employer is required to pay an employee for their services is referred to as the “minimum wage.” Most of the time, the minimum salary is broken down not just on a weekly but also an hourly basis, and the job description and the post-classification determine this. The objective of the minimum wage is to safeguard the economic depression of the labor force and to maintain the standard of life of the people. On the other hand, it has been observed that this restriction is not maintained in contractual projects, and workers are paid far less than this. Paying workers less than the stipulated minimum wage is a form of wage theft.

• Employee Misclassification

According to the Fair Labor Standards Act (FLSA), independent contractors are not entitled to the same benefits or protections as regular employees. Freelancers and other independent contractors are not eligible for benefits such as the minimum wage, overtime pay, or employee insurance. When a company purposefully classifies a regular employee as an independent contractor for the purpose of receiving tax savings, this practice is known as misclassification. Indirectly, this practice leads to wage theft.

• Working Off The Clock

Some enterprises require their workers to report to work on holidays or weekends, and the majority of the time, the demand is warranted. An employee is eligible for supplemental compensation whenever they report for work on such occasions. Wage theft occurs when an employer fails to deliver the appropriate remuneration to their employees.

• Full Wage Theft

Full wage theft is the most flagrant kind of wage theft and happens when an employer either fails to pay for labor done or refuses to pay for work done. Both regular workers and independent contractors are included in its scope of application. It is possible for this to occur when an employer demands workers to put in extra hours, work through their breaks, arrive early, or stay later than they were scheduled.

What to Do if You Suspect Wage Theft

If you believe you’re not being adequately compensated for your labor, the first step is to speak with your employer. If the problem results from an honest error or a technology bug, a responsible employer will attempt to rectify it. If they are unable or unwilling to fix the issue, consult with the person in charge of human resources or another management. Keep a record of any occasions where you feel wage theft has happened, as well as any discussion with your employer. These documents will come in handy if you need to escalate the matter.

If you’ve requested several times and your problem still needs to be handled, it may be time to seek assistance from someone outside your organization, i.e., California Labor Commissioner. You must also provide any tangible proof or documents that might support your claim. Finally, you should always be confident to seek assistance, since your employer cannot discriminate against you or fire you if it is discovered that you have filed a complaint.

The Importance of Having Documentation

Keeping a detailed record of your working hours is critical to back up your pay-claim. It will aid in determining the amount of compensation you are entitled to and the rate of pay. 

It is also necessary to present pay stubs to demonstrate the payment that you did receive. This number and pay rate may be compared to the actual hours worked and the amount you were meant to be paid.

If you received any bounced paychecks from your employer, you must provide them along with why the check could not be processed.

Furthermore, if you have any paperwork from your employer that guarantees your hours, compensation, perks, or any other information pertinent to your income, you should include it in your claim. This helps you establish that your employer did not keep their commitments.

Filing a Claim With The California Labor Commissioner

If you have been the victim of pay theft, you can register a wage claim online with the Labor Commissioner’s Office. The more information you provide, the higher the efficiency of your claim procession. A wage claim initiates the collection procedure for unpaid salaries or benefits. Wage claims can be submitted online, by email, postal mail, or in person. The labor laws of California protect all workers, regardless of immigrant status.

Conclusion 

Wage theft refers to any sort of illicit withdrawal or reduction of employee perks or wages by employers. This has been a serious concern in America since it has affected employee and company productivity and efficiency. This article has discussed the most prevalent signs of wage theft and how to file a wage claim.

By gaining a deeper awareness of wage theft, you have a greater grasp of your rights as an employee. Everyone has the right to a just wage. Consult an attorney or call at 916-446-2000 if you believe you or your coworkers are victims of this crime. Perkins Asbill will assist you in understanding the issue.

When an employee pays a worker less than what they are entitled to, this is called wage theft. That may entail not receiving the minimum wage or not receiving overtime compensation. Wage theft can affect workers of all stripes and across all sectors.

Workers lose billions of dollars each year as a result of this astonishingly widespread occurrence, which frequently involves employers abusing their power over workers to get away with this unethical behavior. Wage theft can occur in a variety of ways and is not always simple to identify.

Minimum Wage Violations and Tip Theft

Whether it is federal, state, or city minimum wage, a worker is always entitled to the highest rate of pay from this. Meaning, if a state minimum wage is higher than the federal one, then all workers should receive the higher of the two. Currently, the federal minimum wage is $7.25 per hour, and the minimum wage in California is $15.00 per hour. No one ought to ever be paid less than that, in theory. 

Employers will, however, take advantage of a few exceptions to these minimums. If an employer’s employees receive tips, they may be paid less than that as long as their tips cover the difference. However, it is common for businesses to pool tips and keep a percentage for themselves, which is a form of wage theft.

Some businesses are willing to take advantage of these gaps in the law in order to get away with paying employees less than what is required by law, which is a kind of wage theft. Additionally, some companies will try to use exemptions to minimum wage laws where they do not apply, which is also a form of wage theft. 

Off-the-Clock Workers and Overtime Wage Theft 

Both white-collar and blue-collar workers, unless they are exempt under the Fair Labor Standards Act, are entitled to overtime pay for time worked beyond reaching 40 hours per week.

Refusing to pay employees for overtime is one of the most frequent ways companies steal from their employees. They may either force workers to “clock out” so that their overtime is not recorded, or they may choose to withhold payment for any overtime hours that are performed. Other businesses may compensate employees for overtime, but only at their regular hourly rates rather than the time-and-a-half mandated by law. But nevertheless, this is a criminal offense and a common type of wage theft.

Wage Theft Through Employee Misclassification

Misclassifying employees as independent contractors is another tactic used by some dishonest businesses to avoid paying their employees. Misclassifying an employee will not only cause tax issues but can also affect the pay a worker receives. When a worker is misclassified, it could result in them not receiving overtime pay, or not receiving certain benefits. 

Because independent contractors are not entitled to benefits like sick or vacation days, workers’ compensation, or other compensation, doing so can save a company a lot of money. While employers are required to pay half of the Social Security tax themselves and the remaining amount is deducted from employees’ paychecks, independent contractors are also responsible for their own Social Security taxes. Some businesses will commit wage theft by placing the burden of paying for employees’ medical expenses, accidents, and Social Security taxes on them.

Illegal Deductions Resulting in Wage Theft

It’s possible that unauthorized payroll deductions are against the law. An employer may be committing wage theft if they deduct the price of medical or physical exams, overpayment of wages, uniform charges, or work tool expenditures.

An employer can only withhold homey from an employee’s wages under California law under the following circumstances:

• When required or permitted to do so by federal or state law
• When a deduction is explicitly approved in writing by the worker to cover premiums, benefit plan contributions, or other deductions 
• When deductions to cover health and pension contributions become authorized through wage bargaining or collective bargaining agreements

When making these deductions, employers are required to abide by both federal and state rules, particularly the restrictions on the amount that may be withheld. Certain deductions are expressly forbidden by California labor law. The expense of any pre-employment medical or physical examination, including a drug test done as a requirement for employment, or any medical or physical examination mandated by law, may not be deducted by the employer. Additionally, an employee cannot be made to pay for a uniform or other tools of the trade by their employer.

Wage Theft Protection Act 

The Wage Theft Protection Act of 2011 amended the Labor Code by adding section 2810.5, which became effective on January 1, 2012. According to the law, each employer must give each new hire a written notice providing specific facts and figures. 

This Act has not prevented wage theft. However, it does provide workers additional guidance on how to handle suspicions of wage theft. The point of the Act was to give workers protection against wage theft and a way to go after an employer if they violated wage laws. 

What to Do About Wage Theft? 

In California, wage theft has a long history of being an issue. The extent of pay theft is unknown, but according to officials, it is rife in sectors like construction, dining, and home health care. Because workers may not even be aware that they are being paid less than what they have lawfully earned, wage theft by illegal deductions frequently goes unreported. Workers in California have a number of rights and protections against wage theft, and if those rights are violated by their employers, they may be subject to severe fines.

If you think your employer has stolen money from you through wage theft, contacting an attorney is imperative. The merits of your case will be assessed and discussed by employment lawyers. California employment lawyers will assist every client with the challenging process of suing an employer for breaking local, state, and federal wage regulations in order to help recoup lost earnings. An attorney may decide that the issue has substance as a possible class action, even though an employer’s salary deductions seem too insignificant to warrant a lawsuit.

Let an experienced lawyer from Perkins Asbill help you understand your legal options. Contact us online or by calling 916-446-2000.

The idea of sharing wages amongst workers in the same company has sparked heated debate and opinions from all sides. To understand the concept in more detail, it is important to contextualize the practice of “salary talk” in a legal sense. 

Rise in Workers Being Fired Due to Wage Discussion

Recently, a woman from Illinois was fired from her job when she discussed her wage with coworkers. She took to the popular sharing platform Reddit where her story began to pick up steam. The woman in question, who has remained anonymous, was fired after only her second day on the job – indicating that her workplace made quick work of those who decided to discuss their salaries. The story, picked up by Newsweek, highlights the question of workers’ rights in regard to free speech in the workplace. 

Lexi Larson, a Denver resident, found herself in a similar position to that of the anonymous Reddit poster. Larson shared her experience looking for work in the tech industry via TikTok. The young professional painted a picture of how she moved from $70,000 to $90,000 in yearly salary to encourage rising tech professionals to do the same. 

After her employer found her TikTok account, Larson took protective measures to protect her job by deleting much of her content. Despite her efforts, she was fired on the grounds of “safety concerns.” According to Larson, the company was concerned that she would post something private to her social media, potentially exposing sensitive material to a wide audience without their consent. 

According to Seattle-based attorney and founder of the Social Media Victims Law Center Matthew Bergman, Larson’s videos showed little reason to fire her after only two weeks on the job. Another attorney gave a comment to USA Today, stating that fired employees are usually given the boot for “disciplinary or performance reasons.” 

The Government Steps in to Address Unequal Pay

Despite the involvement of social media in these cases, recent history shows that the idea of wage secrecy has been hotly debated. Former United States President Barack Obama promoted the desire to equalize pay between men and women – an extension of his wish to promote “equal pay for equal work” more broadly. 

Yet the concern goes back even further as the National Labor Relations Act of 1935 (NLRA) ensured that private-sector employees had the right to perform “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” This clause essentially makes it legal for workers to use their collective power to discuss wages to negotiate for higher ones. 

Yet still, a survey from 2001 found that over one-third of companies had active policies that prohibited the share of salary and compensation specificities. This ever-present reality causes people to question their rights, considering employers are still able to get away with such policies. 

Challenges in Enforcing the Prohibition on Wage Secrecy Policies

Limitations to the NLRA have made it more difficult to control the prohibition of sharing details regarding compensation. Firstly, limitations to the definition of “employee” means that companies may have workarounds in order to keep their restrictive policies in place. One example is the practice of employing a heightened number of “supervisors” and “independent contractors” as these groups are excluded from this rule. Agricultural workers are another party that is not included in many of the protections afforded by the NLRA. 

The NLRA likewise does not apply to workers of federal, state, or local governments, interstate railroads, and airlines. Human resource employees may also be restricted from discussing salaries as they have access to other workers’ private salary information. 

Even more concerning than the 2001 study was a survey in 2011 by the Institute for Women’s Policy Research. In the report, they detail that half of American workers believe that the discussion of their wage information is outright prohibited or discouraged, potentially leading to reprimanding. The culture of forced wage privacy is one that seemingly contradicts the language of the NLRA. 

Larson ultimately returned to her former job, leaving spectators wondering just how protected their rights are. Many Americans consider this daily as many companies seemingly go about unlawful actions regarding workers’ rights unpunished. Even if an afflicted employee wants to contest the actions of the company, many corporations go out of their way to construct different stories to shimmy their way out of disciplinary action from the government. Furthermore, some companies may take it upon themselves to discriminate against employees in other ways in an attempt to intimidate them into quitting or otherwise leaving the company. 

Localized Laws and Attorneys to the Rescue

Skillful attorneys can correctly leverage the NLRA and its language in order to sue for compensation. This is especially important where the National Labor Relations Board (NLRB) falls short, sometimes failing to properly probe and investigate violations of the NLRA alone. 

Recent executive actions are also often used by attorneys to defend workers’ rights in a court of law, one such example being the Non-Retaliation for Disclosure of Compensation Information Executive Order of 2014. Furthermore, experts commenting on the anonymous Redditor’s firing highlighted the importance of attorneys leveraging state laws that protect workers for wage secrecy in their home state of Illinois, as exists in other states as well. 

In fact, California has a relatively recent piece of legislation that explicitly addresses this topic. The Equal Pay Act spells out that any company cannot bar an employee from “disclosing his or her own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise rights under the Equal Pay Act.” Further wage-related actions from California, such as the recent Broad Pay Transparency Law, have made the state a leading beacon of wage-related workers’ rights. 

As employers make rounds on their employees to make sure they are not discussing wages, attorneys, and local legislation have made it possible to take legitimate action against their legal oversteps. With stories twisted and discipline harshened, the topic of wage rights is at the forefront of many people’s minds.