When we start a new job, we go through a process that used to be called orientation. Now, the getting started at a new job phase is called onboarding. Most onboarding sessions include a rather droll segment that reviews the policies created by our new employer. Tucked deep within the employer policy handbook is a section discussing the ramifications of theft, whether theft is defined as taking company property or someone else’s stuff.
What the employer policy handbook fails to address is a growing problem called employer theft. That is, theft in the form of an employer stealing worker wages.
Wage theft has emerged as a crime that costs American workers billions of dollars per year. In fact, a 2017 study conducted by the Economic Policy Institute (EPI) stated in the 10 largest states, nearly 2.4 million workers lost a combined $8 billion due to wage theft. Employment attorney Robert Ottinger knows why wage theft is a rapidly growing problem for American workers.
“There are three reasons for this,” Ottinger said. “First, a lack of government resources to enforce the wage laws. Second, class actions were the primary way to enforce the law and the U.S. Supreme Court has made those harder to bring. Third, the advent of mandatory arbitration by employers now keeps aggrieved employees out of court.”
Let’s discover six ways how employers rip off employees.
Not Paying Minimum Wage
As an oldie, but not a goodie, far too many employers do not pay the minimum wage to workers. Federal and California law requires employers to pay a specific minimum wage, with federal law establishing the minimum wage at $7.25 an hour and California almost doubling the federal rate at between $13 and $14, depending on the size of the organization.
Minimum wage theft hurts American workers that generate the least amount of income. “The EPI study reports that low-wage workers will lose up to 30 percent of their pay per year to wage theft,” Ottinger said.
Stiffing Workers on Overtime
Ranking close to the top way employers rip off employees, failing to pay overtime includes tactics like underreporting hours and paying the same rate for overtime as an employer pays for working a regular schedule.
California law mandates overtime pay for workers that put in more than eight hours a day and 40 hours per week. Overtime pay in California is one and a half times the regular pay rate. Once a worker in California works more than 12 hours in a day, the worker must receive double the regular rate of pay.
Some employers misclassify workers to avoid paying overtime wages.
Another popular wage theft strategy is for employers to illegally take money out of worker paychecks. This tactic works especially well on new employees that have not become accustomed to an employer’s pay period statement. Shady employers deduct expenses such as uniform and equipment costs from the paychecks of unsuspecting workers. They also do not pay employees for taking meal and rest breaks that are granted by California wage and hour law.
The best strategy to avoid this type of wage theft is to keep accurate time clock records for every day that you work.
Tipped employees, especially those working in the hotel and restaurant industries, are highly vulnerable to a practice called tip skimming. With most gratuities paid by a credit card, employers that pay out tips on paychecks have the opportunity to underreport what a tipped employee earned over a pay period. California requires employers to pay tipped employees the same hourly wage rate as other employees. However, that is not the case for most states, which means tipped employees that fall victim to tip skimming often do not earn minimum wage.
Working for Free
A nifty, yet shifty way to rip off employees is to require them to work off the clock. Let’s say you work at a warehouse and you have clocked out for the day. Your boss asks you to hang around for a few minutes to “put away” the latest delivery. You think nothing of the extra 15 minutes you worked, and neither does your boss because your employer just ripped you off for 15 minutes of your wage-earning time.
Working off-the-clock theft is hard to prove because it typically does not involve any documentation.
Reducing Worker Hours
Ottinger says the worst case of wage theft involved an employer reducing the hours worked for several of the employer’s workers. The employer owned nearly 40 Applebee’s restaurants in greater New York City.
“The managers had labor targets, and they met these goals by reducing reported employee work time,” he said. “This was a large-scale, intentional pattern of wage theft that impacted 15,000 employees. The losses are in the hundreds of millions.”
If you suspect your employer has ripped you off, contact a California employment lawyer to get the compensation you deserve. A California employment attorney can apply pressure on your employer by submitting a claim on your behalf with the state or filing a civil lawsuit that seeks monetary damages.