Wage theft is a common workplace issue that is increasingly becoming a problem for employees all over the country. Wage theft may occur when an employee does not receive all of their wages or any wages at all.
Recognizing Wage Theft
Not paying employees correctly maybe a violation of the Fair Labor Standards Act (FLSA). The FLSA establishes a Federal Minimum Wage (states, cities and counties may have higher minimum wages). The FLSA also requires an employer to pay its employees overtime for those hours worked in excess of 40 in a workweek. When an employee is not paid correctly it may also violate other laws.
When an employee is not paid correctly, it can lead to very expensive lawsuits that can be pursued on a class wide basis. It is important for employers to pay employees correctly to avoid these expensive cases.
Perhaps the biggest mistake an employer can make is misclassifying its workers as independent contractors and not employees. Even if an employee signs an agreement claiming to be an “independent contractor” they may still be an employee. Employers often make this incorrect determination to save on costs, but when challenged (often through unemployment claims) it can lead to significant penalties.
Exempt vs Non-Exempt
Many employers believe that paying an employee a salary means they do not need to be paid overtime. However, this is only one side to the question. The employer needs to also evaluate the job duties of the employee to determine if overtime needs to be paid. Failure to classify an employee correctly can lead to significant damages.
Failure to Pay Overtime
Employers can also be liable for not paying an employee for all time worked. This typically occurs when an employer discourages an employee from recording all hours worked or when an employee “hides” their time and does not record it. An employer may be responsible for this work even if it was not recorded. Another common “off-the-clock” example is not paying employees for lunch breaks that are actually work or pre and post shift work.
Think You Are a Victim of Wage Theft?
Unfortunately, wage theft can occur to anyone, at any company, at any time. For this reason, it is critical to ensure that you are receiving your legally contractual pay, you are being classified correctly, and that your withholdings are correct.
If you feel that you are a victim of wage theft, it is important that you direct your concerns to your employer. If your concern is not being addressed appropriately, it is then critical that you consult with an experienced employment attorney immediately. Contact Maduff & Maduff today for help with your employment law needs.