Employers are rarely punished for wage theft

On Behalf of | Feb 13, 2023 | Wage Theft

Businesses in New York and around the country engage in wage theft when they pay their workers less than the prevailing minimum wage, withhold their tips, misclassify them as independent contractors or pressure them to work without clocking in, and very few of them are ever held accountable. This was the sobering conclusion reached by a team of reporters after they studied more than 650,000 wage theft complaints filed by workers in almost every state.

Wage theft is lucrative

The reporters determined that wage theft is so common because it is extremely lucrative. According to a leading think tank, wage theft cheats workers out of about $50 billion each year. Figures from the Federal Bureau of Investigation reveal that the combined annual losses caused by robbery, burglary and automobile theft total less than $10 billion. Every state has harsh penalties for employers that break wage and hour laws, but few employers face them.

Long delays and inefficient enforcement

This is because investigations into these types of wage and hour issues often take months to complete, and the appeals process can drag on for years. When employers are found to have violated state or federal laws, they often close their doors and reopen under different names to avoid paying back wages and fines. When reporters narrowed their search to only successful wage theft claims, they discovered that more than a third of the victims had received no compensation at all despite being owed almost a billion dollars.

Struggling to make ends meet

Wage theft is so pernicious because its victims are usually minimum wage workers who are struggling to make ends meet. Employers take advantage of low-paid workers because they are often unaware of their rights and are unlikely to complain, and the authorities do not do enough to protect them for the same reasons.