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What is Wage Theft, and What Can Employees Do About It?

Frustrated employee looks at her pay statement and frowns.

If you do the work, you should get paid. That's not just an ethical or philosophical point; that's the law. But too many employers flout the law and take money right out of their employees' paychecks.

Nationwide, wage and hour violations cost employees tens of billions of dollars every year, and only a fraction of those instances are even reported, let alone recovered. You do have recourse under Ohio and federal law, but to pursue that recourse, you need to know your legal rights and how to protect them.

Wage theft is failure to pay all the wages owed for your work

When employers fail to pay employees all the wages they are owed by law, that is wage theft. One example is the failure to pay at least minimum wage; according to some estimates, minimum wage violations alone steal as much as $15 billion annually out of employees' paychecks.

Many other instances of wage theft involve overtime violations. Some examples include:

  • Averaging hours over a pay period to reduce or eliminate overtime. Even if you are paid biweekly or monthly, your employer must calculate your overtime rate based on a seven-day workweek. So, if you worked 45 hours in one week and 35 the next, your employer must pay overtime for the 5 extra hours in the first week; they can't simply average the hours over the two weeks.
  • Giving "comp time" instead of overtime for additional hours worked. Some employers may offer additional paid time off (compensatory time or comp time) in lieu of overtime, but this is generally not legal in the private sector.
  • Miscalculating the overtime rate. The overtime pay rate should be based on all of your pay, including commissions and bonuses.
  • Misclassifying employees as exempt in order to avoid paying overtime. Only certain employees are eligible to be classified as exempt, and such exemptions are based on actual job duties, not job titles.
  • Refusing to pay overtime for hours worked in excess of 40 in a workweek. Some employers simply refuse to report or acknowledge overtime. This is against the law.

Other examples of wage theft include withholding pay as punishment, making deductions without the employee's consent (except those required by law), requiring employees to work during unpaid breaks, paying employees at the tipped minimum wage for non-tipped work, not paying for all hours worked, and not paying for travel time when required by law. Violations of the Equal Pay Act (i.e., paying some workers less on the basis of gender) are also wage theft.

Wage theft can happen in any industry, but it disproportionately affects low-income workers, particularly women and people of color. One of the reasons wage theft is so pernicious is that it preys on the power imbalance between employers and employees. Too often, victims of wage theft are unable to come forward and are not in a position to wait for years for their cases to be resolved.

What to do if you think you may be a victim of wage theft

As with any legal matter, if you want to prove wage theft, you need evidence. Start by saving copies of your paystubs and any other pay-related documents in your own records. Keep track of your hours worked, as well. Don't depend on your employer to preserve this information; you need it in a place your employer cannot access or control. For instance, if you log into a payroll system using your work email, make sure you retrieve your pay information and store it in your own records.

Remember, you have the legal right to talk to your coworkers about your salary and benefits (as long as you aren't a manager), even if your employer has a policy that says otherwise. It's quite possible that you are just one victim of a larger pattern of wage theft that needs to be addressed.

That's why your first step when you believe something is wrong should be to talk to an experienced employment law attorney at Gibson Law, LLC. We can explain your rights and options, and there is no obligation to pursue legal action, just answers. Give us a call or contact us online for a free case evaluation.

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