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Wage theft is a growing problem

On Behalf of | Oct 12, 2020 | Employment Law |

The pandemic has put countless stresses upon workers and business owners in almost every industry. Amidst this upheaval, it is no surprise that wage theft is a growing problem.

Many of these victims may count themselves lucky because they are not one of the millions who lost their jobs due to business closure. However, a new report warns that wage theft is dramatically increasing, particularly among those who can least afford it.

What is wage theft?

Simply put, wage theft occurs when workers do not receive payment for services rendered. Common examples include:

  • Failure to pay overtime
  • Not paying the state minimum wage of $12.75 (which will continue to increase until 2025)
  • Job title does not match the job description
  • Inaccurate payment information
  • Theft of tips (including pooling tips among all staff members)
  • Withholding pay or paid sick time

These examples of theft often occur in hospitality, retail, childcare, transportation and warehousing. Employers must comply with all local, state and federal regulations regarding wages and payment. The employer must also honor the employment contract signed by both parties.

Why is wage theft a growing problem?

Wage theft rose during the great recession in 2007-2009 when there was a 10-22% chance of it occurring. This was due to the large numbers of unemployed workers at the time of the recession. The 2020 pandemic unemployment figures hovered near 15% during April, May, June and July. While the numbers have since gone down, they are still well above the 3.5% pre-pandemic levels in February of 2020.

These crimes must be reported

Government regulators often rely on employees to report employers engaging in wage theft. Owners or managers may rationalize this behavior as the only way to keep the business afloat, but stealing money from employees (who also have bills to pay) is never okay.

The state’s Attorney General’s Fair Labor Division will investigate violations and penalties for wage theft, resulting in fines and civil penalties. It is also important to note that employers cannot legally retaliate against the employee who reported them.

Since this type of theft is not reported to law enforcement, it is often best to work with an attorney who handles employment law issues here in the Northeast. An experienced employment law attorney can be a tremendous help to victims suffering from wage theft.