Wage theft is a catch-all term for a range of situations in which an employer fails to pay a worker – from paying less than minimum wage to withholding tips. It occurs across a wide range of industries, hurting millions of working families each year

Wage Theft

Wage theft is not incidental or rare; it is incredibly common. Wage theft is a catch-all term for a range of situations in which an employer fails to pay a worker, and it can take many forms – from employers paying employees less than the minimum wage or failing to pay overtime, to withholding tips, to requiring employees to work “off-the-clock.” These forms of theft hurt working families, add unnecessary burdens onto already-overtaxed social safety nets, reduce tax revenues, and have a harmful impact on local economies. Wage theft occurs throughout the country and across a wide range of industries, affecting millions of workers each year.

As counties and cities in California move to raise the minimum wage, we must ensure that our low-wage workers, who already face so many challenges, receive the pay that they have earned.”

— California State Senator Tony Mendoza

The federal Fair Labor Standards Act of 1938 (FLSA) was enacted to protect workers from the most egregious forms of wage theft, requiring employers to pay at least the federal minimum wage and to provide overtime when applicable. States are permitted to supplement the baselines of the federal law with stronger state policies, and many of them have.

To improve upon federal floors, states have enacted legislation to address wage theft – including by increasing the cost of violating wage and hour laws, targeting “bad actors” to prevent repeat offenses, empowering state and local wage enforcement authorities, and improving small claims court administrative processes around wage theft claims. While these measures have begun to address the problem in certain states, wage theft remains a significant issue throughout most of the country – with numerous studies and surveys finding wage and hour violation rates as high as 75%, depending on industry and occupation.

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