What Is Wage Theft, And Are You a Victim?

Business.com / HR Solutions / Last Modified: February 22, 2017

Millions of dollars are stolen from hard working California employees each year. It's unfair, but the culprit will surprise you.

Millions of dollars are stolen from hard working California residents each year. These thefts aren't the work of scammers or thieves. The culprits are employers who are engaging in an illegal business practice called wage theft.

While one might think that wage theft is a problem that only impacts a small percentage of employees working for bad companies, the reality is that it is actually a major problem in California that affects thousands of workers every year. 

A study done by UCLA found that an estimated $26 million in wages per week are stolen from low-wage workers in Los Angeles County alone. In California, wage theft has been particularly damaging for low-wage workers and their communities. As a worker who performed work for an employer, it is your right to be paid.

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What Is Wage Theft?

Wage theft is an illegal practice in which an employer fails to pay workers for all of the work that they performed. Employers are obligated by law to fairly compensate their employees for the work that they have performed. The Fair Labor Standards Act (FLSA) establishes federal guidelines for how employees should be paid for their time and the working schedules that are acceptable.

The Wage Theft Prevention Act (AB 469) criminalizes willful violations for non-payment of wages after a court or administrative order has required the employer to provide restitution to the employee mentioned in the judgment or order. Under the law, all private sector employees are covered. Even so, some employers either don't understand the law or refuse to follow it.

Unfortunately, many employees are left to take matters into their own hands. For California workers, that means contacting the Division of Labor Standards Enforcement (DLSE). California employees have the right to file wage claims with the DLSE. However, claims must be brought promptly before the Division, within one to three years of the date of which the wages are owed, in order for the DLSE to act.

How Do You Know if You Are a Victim of Wage Theft?

California has many laws on the books that are designed to prevent wage theft. However, part of the problem is that many workers don’t realize that they are victims of wage theft, especially in cases where the workers have received some payments from their employers.

You could be a victim of wage theft if you can answer ‘yes’ to any of the following questions:

  1. Do you work more than 40 hours per week without receiving overtime pay?
  2. Are you labeled as an independent contractor by your employer when you believe you're actually an employee?
  3. Are you being paid less than minimum wage?
  4. Have you been asked to work more than your stated hours per your employment agreement and have not been paid for the additional time?
  5. Are strange deductions being taken from your paychecks?
  6. Are there days that you've worked where you haven't been paid?
  7. Did your employer hold your final paycheck after you left the company?

Your first instinct should be to talk to your employer about the issue. The next step should be contacting an attorney to file a wage claim if the employer does not make any effort to resolve the problem immediately.

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Types of Wage Theft

While it might be easy to identify cases of wage theft when a worker has not been paid at all, wage theft can also apply in many other situations. According to the Fair Labor Standards Act (FLSA), wage theft also includes:

  • Failure to pay minimum wage
  • Misclassification of employees
  • Illegal deductions
  • Failure to pay wages for overtime or breaks
  • Failure to pay wages for being asked to report early and/or leave late
  • Pressuring workers not to file workers' compensation claims
  • Denial of pay for sick leave or vacation time

As a result, proving your claim could require substantial documentation along with a thorough investigation of the employer’s business practices. This is why is it so important for victims of wage theft to contact an experienced lawyer.

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What Should You Do if You Believe That You Have a Wage Theft Case?

If you believe that you are a victim of wage theft, you should obtain legal counsel right away. Delaying your claim could significantly reduce the chances of receiving compensation for your work.

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