Wage Theft Is So Rampant That $3 Billion Has Been Recovered From 2017-2020

Wage theft is out of control. And it hits the lowest paid workers in our economy – those who need the income most.

The Economic Policy Institute reports on the enormous problem that faces workers who depends on wages to get by daily:

“What this report finds: Each year millions of workers across the country are victims of wage theft—meaning they are paid less than the full wages to which they are legally entitled. Between 2017 and 2020, more than $3 billion in stolen wages was recovered on behalf of workers by the U.S. Department of Labor, state departments of labor and attorneys general, and through class and collective action litigation.

Why it matters: This staggering amount represents just a small portion of wages stolen from workers across the country. And while wage theft impacts workers broadly, it disproportionately affects low-wage workers, many of whom already are struggling to make ends meet. Wage theft also disproportionately impacts women, people of color, and immigrant workers because they are more likely than other workers to be in low-wage jobs. Finally, these stolen wages hurt local economies and tax revenues.

What can be done about it: Increase funding for the Department of Labor’s Wage and Hour Division to boost institutional and investigative capacity; engage in proactive and strategic enforcement in those industries where violations are especially severe or rampant; enhance civil monetary penalties for wage and hour violations; and protect worker rights to collective action, as union workers are less likely to experience wage theft because they have the bargaining power to establish mechanisms to combat the practice.

Wage theft occurs any time employees do not receive wages to which they are legally entitled for their labor. This could take many forms, including paying workers less than the minimum wage, not paying overtime premiums to workers who work more than 40 hours a week, or asking employees to work “off the clock” before or after their shifts.

Even the theft of seemingly small amounts of time can have a large impact. Consider a full-time, minimum wage worker earning the federal minimum wage of $7.25 an hour who works just 15 minutes ‘off the clock’ before and after their shift every day. That extra half-hour of unpaid work each day represents a loss to the worker (and a gain to the employer) of around $1,400 per year, including the overtime premiums they should have been paid. That’s nearly 10% of their annual earnings lost to their employer that can’t be used for utilities, groceries, rent, or other necessities.”

For the rest of the story, visit the Economic Policy Institute here.

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