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What does wage theft look like?

On Behalf of | Mar 7, 2024 | Wage & Hour

It’s a basic principle – when someone works for an employer, they expect that employer to compensate them for their time. And when a worker receives pay, the hours worked should match the hours on their pay stub.

Unfortunately, some companies try to avoid paying their employees their full wages, and not in ways that are always easy to catch. Therefore, all employees need to learn about how an employer – any employer – can commit wage theft.

The subtle signs

Wage theft is a significant issue for Indiana’s workforce. In 2023, employees in this state worked an extra one billion unpaid hours, costing them approximately $7.25 billion. Nationwide, over $50 billion has been stolen from the workforce.

The following are some common situations wherein employers don’t pay their workers the full wages they are entitled to:

  • Non-payment of overtime: The Fair Labor Standards Act (FLSA) states that employees must receive overtime pay, 1.5 times their regular rate, for any hours worked beyond 40 during a workweek. One way they do this is by giving the employee a “promotion” with a salary instead of an hourly wage.
  • Unauthorized deductions: Some employers make illegal deductions from workers’ paychecks for damages, cash drawer shortages or mandatory physicals.
  • Working off-the-clock: Another common form of wage theft occurs is when an employer requires a worker to perform certain duties after they clock out and without compensation. These extra duties may be cleaning up, completing paperwork or attending meetings.
  • Misclassification of employees: Independent contractors aren’t entitled to overtime, health insurance, paid time off or other benefits. A company may deprive employees of their rights and fair wages by classifying them as contractors.
  • Stealing tips: In some service industries, employers may withhold or take a portion of the tips intended for their employees.

Wage theft strips workers of their hard-earned income and could push them into financial hardship. If you suspect you’re a victim of wage theft, it’s crucial to discuss your situation with a skilled legal team as soon as possible so that you can make informed decisions about exercising your rights and options under the law.