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What is Wage Theft?

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Southern California workers beware. Wage theft is rampant in our state. If you think being hired for a job automatically means that you can count on receiving a fair day’s pay for a hard day’s work, think again. Unscrupulous employers are all around us.

Wage theft is illegally avoiding paying workers what is owed to them. In pursuit of greater profits, greedy employers employ any number of nefarious tactics to deprive their workers of part of their wages. Wage theft is especially common in lower paid occupations in which employees may be less likely to complain for fear of losing a desperately needed job.

What Methods Do Employers Use to Steal Wages?

The methods of underpaying workers are many, and include, among others:

  • Paying less than the legal minimum wage. Employers nationwide steal an estimated $15 billion annually by paying workers less than the law requires.
  • Misclassifying employees as contractors to avoid the employer’s required payroll contributions: social security, unemployment, etc., and depriving the worker of benefits.
  • Failing to pay overtime, often by misclassifying the regular worker as “administrative” personnel
  • Paying employees with bad checks.
  • Failing to pay a worker’s final paycheck.
  • Failing to pay for accrued vacation and/or sick time when a worker is terminated or leaves the job.
  • Failing to pay reimbursable expenses, such as uniform, required cell phone, mileage on your vehicle, and so forth
  • Forcing employees to work off the clock.
  • Making excessive deductions from an employee’s paycheck.
  • Failing to provide required breaks and meal time.

What Are the Costs of Wage Theft to individuals and Society?

With a rising minimum wage in California, wage theft is becoming ever more pervasive. California’s workers lose nearly $2 billion every year to wage theft by their employers. The state minimum wage is currently $10.54 per hour. But workers the low end of the scale are being cheated out of $64 per week, on the average, or around $3,300 per year. That’s more than fifth of their earnings being lost by those who can least afford it. Not only are the individual workers affected, but also their families and the rest of society, as the underpaid are often forced to apply for public benefits in order to obtain food, housing, and health care.

What Solutions Are Available to California’s Wage Theft Problem?

Wage theft often goes unreported, and even when it is reported, it is extremely difficult for an employee to actually collect what is owed. Even if a worker is able to obtain a court ordered judgment against the employer, it may be close to impossible to collect. Employers who routinely engage in this illegal activity often go out of business, change their company name and business license, or disappear entirely.

The problem has become so severe that many California cities are beginning to establish special agencies to deal with wage theft, and the state has a law in place law, SB588, which has made it easier for the California Commissioner of Labor to assist workers in getting the pay that is owed them, not only from corporations but also from individuals who have failed to pay those they hire at the required minimum rate.

Still, for many people who have unpaid wages coming to them, depending on the circumstances, it may be more efficient to hire a California labor lawyer to attempt to go after the employer to enforce payment. This may be accomplished through negotiation or litigation, and when necessary, enforcement proceedings to collect on a judgment issued by the court. A lawyer can also track changes of business name and license when an employer has attempted to evade their responsibility by performing a disappearing act. Many attorneys will agree to take these cases on contingency, so you don’t have any out-of-pocket expenses, and courts typically include an award for attorney’s fees and litigation costs.