What is wage theft?

Wage theft covers a variety of infractions that occur when workers do not receive their legally or contractually promised wages.

Common forms of wage theft are non-payment of overtime, not giving workers their last paycheck after a worker leaves a job, not paying for all the hours worked, not paying minimum wage, and even not paying a worker at all.

What laws are broken in wage theft cases?

Fair Labor Standards Act (FLSA)

Most commonly wage theft is a violation of the Fair Labor Standards Act (FLSA), which provides for a federal minimum wage and allows states to set their own (higher) minimum wage, and requires employers to pay time and a half for all hours worked above 40 hours per week.

Davis-Bacon Act

Under the Davis-Bacon Act, workers being paid by a contractor or subcontractor of a federal government contract are entitled to receive the prevailing wage for that work in the city or region of the U.S. where the work is done. Prevailing wages, which are calculated by the US Department of Labor, are higher than minimum wage. Many federal contractors simply ignore this law.

Tax laws

Wage theft may also involve violations of tax laws, through misclassification of employees as independent contractors. When a worker is called an independent contractor, the employer does not pay their share of federal taxes.

Types of workplace & industry wage theft

Wage theft is endemic, and no group of workers is immune, including workers earning good wages. It is more likely to occur in non-union workplaces.  Union workers generally receive pay according to their negotiated contract, and any wage theft would be challenged by the union. Immigrant and native born workers alike have their wages stolen, though low wage workers are particularly vulnerable.

Agriculture, poultry processing, janitorial services, restaurant work, garment manufacturing, long term care, home health care and retail are the industries with the most reported cases of wage theft.

NY Wage Theft Prevention Act (WTPA)

In New York State the The Wage Theft Prevention Act (WTPA) took effect on April 9, 2011. The law requires employers to give written notice of wage rates:

  • To each new hire
  • To all employees by February 1 of each year

The notice must include:

  • Rate or rates of pay, including overtime rate of pay (if it applies)
  • How the employee is paid: by the hour, shift, day, week, commission, etc.
  • Regular payday
  • Official name of the employer and any other names used for business (DBA)
  • Address and phone number of the employer’s main office or principal location
  • Allowances taken as part of the minimum wage (tips, meal and lodging deductions)

The notice must be given both in English and in the employee’s primary language (if the Labor Department offers a translation). The Department currently offers translations in the following languages: Spanish, Chinese, Haitian Creole, Korean, Polish and Russian.

New York Department of Labor Wage Theft Prevention Act fact sheet

Wage Theft Prevention Act Frequently Ask Questions