Wage theft is a pervasive issue that affects workers in various industries across the nation. Addressing the prevalence of wage theft and identifying the different types of it is important in helping combat its adverse effects. Equally as important is understanding the grave consequences that wage theft can have for employers and employees alike. In this article, we will explore these two topics in an effort to spread awareness about this prominent issue.

Common Types of Wage Theft

There are several different types of wage theft, each undermining workers’ rights and financial stability. Here’s a look at some of the most common forms of it.

Minimum Wage Violations

When it comes to minimum wage, most states have specific laws and hourly rates that are enforced by the Department of Labor. These rates differ significantly from one another and may also be further broken down by city and county, depending on where you reside. In addition, there is a federal minimum wage of $7.25 for non-exempt employees that is enforced by the U.S. Department of Labor. Regardless of what state you are working in, paying employees less than the legal minimum is a violation and subject to penalties and fines.

Unpaid Overtime

Another common issue that is experienced by employees across the country is unpaid overtime. The Fair Labor Standards Act (FLSA) requires that non-exempt employees receive overtime pay for hours worked beyond the standard workweek, which is typically 40 hours. This rate will be paid out at least one and a half times their regular rate of pay. 

Meal and Rest Break Violations

Another type of wage theft is meal and rest break violations. Every state also has minimum lengths of times of meal and rest breaks that must be enforced depending on the number of hours worked by the employee each day. Failure by an employer to provide these breaks or give adequate compensation for missed breaks is not permissible.

Off-the-Clock Work 

Sometimes, employees may be asked to perform work-related tasks either before or after clocking in. If an employee is required by their employer to work off-the-clock and they are not compensated for it, this may constitute wage theft as well. 

Consequences of Wage Theft

The consequences that wage theft can have are far-reaching as they can have devastating impacts on both employers and employees. Here are some consequences of wage theft that are most commonly seen.

Financial Hardship

One of the most immediate and direct impacts of wage theft is the financial hardship that it imposes on workers. When workers are being underpaid or not paid for the work that they are performing, this can result in significant financial strain, particularly for those employees who live paycheck to paycheck. In the long term, this can even result in increased debt and foreseeable economic instability. 

Emotional and Psychological Stress

Wage theft can also cause emotional and psychological stress to employees. If a worker is being severely underpaid, for example, this may cause them to feel undervalued, exploited, and powerless. As a result, these feelings can cause mental health issues such as anxiety and depression that can take a toll on an individual’s well-being. 

Negative Impact of Workplace Morale

In some cases, wage theft may create a toxic work environment, particularly if it is happening to several employees. When employees are aware or suspicious that they are being underpaid for their work, this can lead to decreased morale, productivity, and loyalty. In turn, this can affect the employer as company performance declines and employee turnover rates increase. 

Legal Implications

In addition to the various financial, emotional, and psychological consequences that wage theft can have on an employee and the workplace as a whole, wage theft violations are also subject to a handful of legal penalties. Employers who are found guilty of wage theft may face significant legal consequences including lawsuits, hefty fines, and other legal penalties. If your employer has been engaging in wage theft, it is important that you file a complaint with the Department of Labor. As the Orange County wage violation attorneys at Sessions & Kimball describe, filing a wage claim in a timely manner is vital, as failure to do so may make you ineligible to recover compensation.