What is Wage Theft?
Your questions about workers’ rights, answered
What is wage theft?
Wage theft means an employer does not fully pay an employee for their labor. Wage theft takes many forms, such as paying less than the minimum wage, failing to pay overtime, requiring off-the-clock work, or taking illegal deductions. Wage theft is a major problem in the U.S., and costs employees an estimated $15 billion a year in lost wages. Workers in low-wage industries are most commonly the victims of wage theft.
Federal, state, and local laws protect employees from wage theft. These laws also give employees tools to recover stolen wages from their employers.
What is a wage theft notice?
In New York, employers must give their employees written notice of wage rates under the Wage Theft Prevention Act. The notice must include the rate of pay, whether the employee receives wages hourly, any deductions, the scheduled payday, and the employer’s contact information. Employers must provide a wage notice to new employees in English and the employee’s primary language. They must also keep a copy of the wage notice and the employee’s signed acknowledgment for six years after ending the employment relationship.
If employers fail to provide wage notices, they can be fined up to $5,000 per employee.
Where do I report wage theft?
In New York, employees can file a wage claim with the New York Department of Labor. The department will investigate the claim, hold a hearing, and help employees recover any stolen wages. Victims of wage theft can also file a claim with the Wage and Hour Division of the federal Department of Labor. However, in New York, state law provides stronger protections than federal law, and state law gives employees longer to file a claim.
Employees also have the option of contacting a wage theft lawyer and filing a lawsuit in court.
What is the punishment for wage theft?
Employers found guilty of committing wage theft must repay the stolen wages to their employee. Victims of wage theft also qualify for liquidated damages, which equal the amount of unpaid wages. For example, if a restaurant failed to pay a server $10,000 in minimum wage and overtime, the server could receive $10,000 in unpaid wages and $10,000 in liquidated damages, for a total of $20,000. This provision is known as double damages.
The Wage Theft Prevention Act also orders fines of up to $10,000 per employee for companies that fail to provide a wage notice or pay stubs. The Act also punishes repeat offenses by ordering penalties of between $1,000 to $20,000 for employers who violated the law in the previous six years.
Can you sue a company for wage theft?
Yes, New York law allows employees to file a lawsuit against a company for wage theft. You can also use a lawyer to file a complaint with the New York Department of Labor or the federal Wage and Hour Division of the Department of Labor. If you choose to hire a lawyer, both the federal Fair Labor Standards Act and New York Labor Laws require your employer to pay your attorney fees if you win your claim.
How do you report wage theft?
Employees can file a claim for wage theft independently with the federal Wage and Hour Division or the New York Department of Labor. A wage theft lawyer can help you navigate the process.
Victims of wage theft can also file a lawsuit. This may be the best available remedy for certain employees. New York Labor Law does not allow employees working in administrative, executive, or professional roles to use the state-facilitated system to collect back wages if they make more than $900 per week.