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Study finds employers steal billions each year from worker paychecks

| Nov 29, 2019 | Wage-And-Hour Violations

A survey finds minimum-wage employees are among the hardest hit by wage theft by employers, with each worker losing an average of $3,300 each year. The study by the Economic Policy Institute (EPI) reveals companies steal an estimated $15 billion a year from their employees’ paychecks.

EPI says wage theft has the greatest impact on those who can least afford it and causes many families to live below the poverty line, increasing reliance on public assistance, which ends up costing taxpayers more money and hurts local economies.

Key takeaways

The EPI study focused on the 10 most populous states, including California, which account for more than half of the entire U.S. workforce. Their findings show:

  • 4 million workers report being paid less than the minimum wage, approximately 17% of the workforce earning low wages
  • The total underpayment of those 10 states amounts to $8 billion, suggesting $15 billion nationwide in wage theft
  • Minimum wage workers are underpaid by an average of $64 per week
  • Women, people of color, younger workers and immigrants are more likely to be underpaid
  • Of the 10 most populous states, workers are more likely to be underpaid in Florida, Ohio and New York
  • The poverty rate of people making less than the minimum wage in the 10 states is 21%, three times higher than minimum wage workers overall

How do employers steal from workers?

Wage theft comes in many forms, including:

  • Not paying non-exempt workers time-and-a-half for overtime
  • Paying workers less than the minimum wage
  • Asking or requiring employees to work off-the-clock
  • Taking illegal deductions from paychecks
  • Not providing pay stubs documenting deductions
  • Confiscating tips from workers who rely on tips or failing to make up the difference between tips and the minimum wage
  • Wrongly classifying workers as independent contractors

Protect your rights with knowledgeable legal advice

EPI says states must enact stronger legal protections for workers against wage theft, increase penalties for offenders, step up enforcement capabilities and provide protection for workers against retaliation. An experienced employment attorney here in California will protect your rights and help you determine if you have been the victim of wage theft and help you seek the compensation you deserve.