What Is Wage Theft? Federal Protections and How to Report
Wage theft occurs when employers fail to pay workers the full wages they have legally earned. This includes unpaid overtime, minimum wage violations, off-the-clock work, illegal paycheck deductions, employee misclassification, and withheld final paychecks. Wage theft costs American workers an estimated $15 billion or more annually—more than all property crimes combined. Federal law prohibits wage theft through the Fair Labor Standards Act and provides remedies including back pay, liquidated damages, and attorney’s fees.
Understanding Wage Theft: The Hidden Epidemic
Wage theft is the illegal practice of not paying workers for all hours worked or not paying them the wages they are legally entitled to receive. Despite its massive economic impact, wage theft often goes unreported because workers don’t realize it’s happening, fear retaliation, or don’t know how to seek help.
Unlike robbery or burglary, wage theft typically occurs through systematic employer practices rather than one-time incidents. It happens across all industries and income levels, affecting low-wage workers in restaurants and retail as well as salaried professionals in corporate offices.
The Economic Policy Institute estimates that minimum wage violations alone cost workers up to $15 billion per year. When you include all forms of wage theft—unpaid overtime, off-the-clock work, illegal deductions, and misclassification—the total stolen from American workers each year exceeds all robberies, burglaries, larcenies, and motor vehicle thefts combined.
Why Wage Theft Matters
Wage theft devastates workers and their families. For low-wage workers living paycheck to paycheck, even small amounts of stolen wages can mean choosing between rent, food, or medicine. For all workers, wage theft represents a betrayal of the basic employment bargain: honest work deserves honest pay.
Wage theft also creates unfair competition. Employers who steal wages undercut law-abiding businesses by artificially lowering their labor costs. This race to the bottom hurts workers, ethical employers, and the broader economy.
Federal law recognizes wage theft as a serious violation of workers’ rights. The Fair Labor Standards Act, Portal-to-Portal Act, and related federal laws establish clear standards for wage payment and provide strong remedies for violations.
Source: Economic Policy Institute – Wage Theft Research
Common Types of Wage Theft
Wage theft takes many forms. Understanding the most common violations helps you recognize when your employer is stealing your wages.
Unpaid Overtime
Unpaid overtime is one of the most prevalent forms of wage theft. Under federal law, nonexempt employees must receive 1.5 times their regular rate for hours worked over 40 in a workweek. Employers violate this requirement through various schemes.
Common unpaid overtime tactics:
Misclassifying employees as exempt: Giving employees manager or professional titles without the duties or salary level required for exemption. A “manager” who spends most of their time doing the same work as hourly employees isn’t truly exempt.
Refusing to pay overtime entirely: Simply refusing to pay the overtime premium, sometimes claiming the employee is salaried or exempt when they’re not.
Miscalculating the regular rate: Excluding bonuses, shift differentials, or other compensation from the regular rate calculation, resulting in too-low overtime rates.
Requiring comp time instead of overtime pay: Offering time off instead of overtime wages. This is illegal in the private sector under federal law.
Example: Sarah works as an assistant manager at a retail store earning $600 per week on salary. Her employer claims she’s exempt from overtime. However, she spends 90% of her time performing the same sales tasks as hourly employees and has no genuine management duties. She works 50 hours per week. Because she doesn’t meet the duties test for exemption, she should receive overtime for 10 hours weekly. At a $15 hourly equivalent rate ($600 ÷ 40 hours), her overtime rate is $22.50. Her employer owes her $225 per week in unpaid overtime—over $11,000 annually.
Minimum Wage Violations
Federal law requires employers to pay at least $7.25 per hour to covered nonexempt employees. Many states require higher minimum wages. Minimum wage violations occur when employers pay less than the legal minimum.
Common minimum wage violations:
Paying straight cash below minimum wage: Especially common in restaurants, domestic work, and day labor. Paying $6 per hour cash violates federal law.
Illegal tip credit abuse: Federal law allows employers to pay tipped employees $2.13 per hour if tips bring total compensation to $7.25. Violations occur when employers take the tip credit without meeting requirements, force employees to share tips with managers, or fail to make up the difference when tips fall short.
Improper piece-rate or commission systems: When piece-rate or commission calculations result in effective hourly rates below minimum wage, employers must pay additional wages to reach minimum wage.
Compensating with goods instead of wages: Paying workers primarily in food, lodging, or goods rather than cash wages sufficient to meet minimum wage requirements (outside specific exemptions).
Example: Miguel works as a tipped server. His restaurant pays him $2.13 per hour and claims a tip credit. During a slow week, his tips only bring his effective rate to $6.50 per hour. His employer is required to pay additional wages to bring him to $7.25 per hour minimum wage, but doesn’t. This is wage theft.
Off-the-Clock Work
All time an employer requires you to work must be paid. Off-the-clock work occurs when employers require or permit work without recording and compensating that time.
Common off-the-clock work situations:
Pre-shift work: Requiring employees to arrive 15-30 minutes early to set up, boot up computers, put on uniforms, or attend meetings before clocking in.
Post-shift work: Requiring employees to finish tasks, clean, or complete paperwork after clocking out.
Working through meal breaks: Automatically deducting 30-minute meal breaks whether taken or not. If you worked through lunch, that time must be paid.
Responding to calls/emails off-duty: Requiring nonexempt employees to answer work calls, respond to emails, or monitor systems while off the clock.
Mandatory meetings: Requiring attendance at training, safety meetings, or staff meetings without compensation.
Donning and doffing: Requiring employees to put on protective equipment, uniforms, or gear before clocking in or after clocking out.
The general rule is simple: if your employer requires or permits you to work, that time must be compensated at least at minimum wage, with overtime premium if applicable.
Example: Janelle works at a fast-food restaurant. Her manager requires all employees to arrive 20 minutes before their shift to count inventory and prepare the line, but tells them not to clock in until the store opens. She works 5 shifts per week, losing 100 minutes of pay weekly—over 86 hours annually. At $12 per hour, her employer steals more than $1,000 per year from her.
Illegal Paycheck Deductions
Federal law allows certain paycheck deductions but prohibits others. Illegal deductions can bring your pay below minimum wage or reduce your overtime compensation.
Prohibited deductions include:
Cash register shortages: Deducting for cash register shortages, especially when it brings pay below minimum wage. Many states prohibit this entirely.
Broken or damaged equipment: Charging employees for broken dishes, damaged tools, or equipment breakage, particularly when these are ordinary business costs.
Uniforms and tools: Deducting the cost of uniforms or required tools if it brings pay below minimum wage. Under federal law, employers must provide or reimburse for required uniforms.
Business operating costs: Passing typical business expenses to employees through paycheck deductions, such as credit card processing fees, merchant fees, or business licenses.
Kickbacks: Requiring employees to give back portions of their wages to supervisors or employers.
Legal deductions include those required by law (taxes, court-ordered garnishments), authorized in writing by the employee for their benefit (health insurance premiums, 401k contributions), and certain advance repayments agreed to in writing.
Example: Roberto works as a delivery driver. His employer deducts $50 per week for vehicle “wear and tear” without Roberto’s written consent. These deductions reduce Roberto’s effective pay rate below minimum wage. This violates federal law.
Employee Misclassification
Misclassification occurs when employers classify workers as independent contractors or exempt employees when they should be classified as nonexempt employees. Misclassification denies workers minimum wage, overtime, and other protections.
Independent contractor misclassification:
Employers save money by treating workers as independent contractors instead of employees. Independent contractors don’t receive minimum wage or overtime, pay both sides of payroll taxes, and lack unemployment insurance and workers’ compensation protections.
Federal law uses economic reality tests to determine worker classification. Key factors include the employer’s control over the work, whether the work is integral to the employer’s business, the worker’s opportunity for profit and loss, and the permanency of the relationship.
If you perform work integral to the company’s business, work under their direction and control, and don’t operate an independent business, you’re likely an employee regardless of what your employer calls you.
Example: Linda performs massage therapy at a spa. The spa sets her schedule, requires her to use their rooms and products, sets her prices, and provides all customers. The spa calls her an independent contractor and pays no overtime. Under federal economic reality tests, Linda is likely an employee entitled to overtime pay for hours over 40 per week.
Exempt employee misclassification:
Employers sometimes classify employees as exempt from overtime to avoid paying time-and-a-half. True exemption requires meeting salary level requirements ($684+ per week), salary basis payment, and specific executive, administrative, or professional duties.
Simply giving someone a “manager” title or paying them a salary doesn’t create exemption. The employee’s actual duties must meet strict federal tests.
Example: Kevin works as a “sales manager” at a furniture store earning $700 per week on salary. His job involves direct sales to customers with occasional supervisory duties. He works 50-55 hours weekly. Because his primary duty is sales (not management) and he doesn’t regularly direct other employees’ work, he likely doesn’t meet the executive exemption test. He should receive overtime for hours over 40.
Tip Theft and Tip Pooling Violations
Federal law allows tip pooling among employees who customarily receive tips but prohibits managers and supervisors from participating in tip pools. Employers cannot keep any portion of tips except to operate valid tip pools.
Common tip violations:
Manager participation in tip pools: Including shift supervisors, assistant managers, or managers in employee tip pools. This violates federal law.
Employer retention of tips: Keeping any portion of employee tips, whether through service charges, credit card processing fees, or direct confiscation.
Forced tip-outs to kitchen staff: Federal law prohibits mandatory tip-outs to back-of-house employees in restaurants where employers take a tip credit (though this is permitted when employers pay full minimum wage without tip credit).
Tip credit violations: Taking a tip credit ($5.12 per hour reduction from minimum wage) without properly informing employees or while violating tip pooling rules.
Example: A restaurant requires servers to contribute to a tip pool that includes the kitchen manager. The manager shouldn’t receive pooled tips because managers cannot participate in tip pools. Servers may recover all tips shared with the manager.
Final Paycheck Violations
Federal law doesn’t specify exactly when final paychecks must be paid, but many states have strict deadlines. Under federal law, final paychecks must include all earned wages. Withholding final paychecks is wage theft.
Common final paycheck violations:
Withholding paychecks pending return of property: Refusing to pay earned wages until the employee returns keys, uniforms, or equipment. While employers can deduct for unreturned property in some situations, they generally cannot withhold entire paychecks.
Refusing to pay accrued vacation: In states where vacation is considered earned wages, refusing to pay out accrued vacation time in the final paycheck.
Withholding final pay pending paperwork: Refusing to provide final paychecks until employees sign releases, non-compete agreements, or other documents.
Paying less than earned: Shorting the final paycheck by not including all hours worked, earned commissions, or due bonuses.
Example: Tamara quits her job and requests her final paycheck. Her employer says she’ll receive it once she returns her uniform. Two weeks pass. Under federal law, her employer must pay all earned wages. Conditioning final pay on uniform return may violate wage laws (and definitely does in states with strict final paycheck deadlines).
Time Shaving and Rounding Abuse
Time shaving occurs when employers systematically reduce recorded work time, stealing a few minutes here and there that add up to significant wage theft over time.
Common time shaving practices:
Manual time edits: Managers manually editing time records to remove a few minutes before or after shifts without justification.
Automatic clock rounding abuse: Using time-rounding systems that consistently favor the employer. While neutral rounding systems that average out are legal, systems that always round down or cut employee time are not.
Forced early clock-outs: Requiring employees to clock out during slow periods while remaining available to work, or forcing clock-outs before actual departure.
Deleting short work periods: Not recording or paying for brief work periods like 10-minute callbacksor 15-minute meetings.
Example: Darius works retail. His time system rounds to the nearest 15 minutes, but his manager has configured it to always round down for clock-ins and round up for clock-outs. Over time, this shaves 20-30 minutes per week from his paycheck. This biased rounding violates federal law.
Source: DOL Wage and Hour Division – Common Violations
Federal Protections Against Wage Theft
Multiple federal laws protect workers from wage theft and provide remedies when violations occur.
Fair Labor Standards Act (FLSA)
The FLSA is the primary federal wage and hour law. It establishes minimum wage, requires overtime pay, mandates recordkeeping, and prohibits certain child labor practices. Most wage theft claims arise under FLSA violations.
The FLSA applies to enterprises with at least $500,000 in annual gross sales and to individual employees engaged in interstate commerce. Interstate commerce is broadly interpreted—making phone calls to other states, handling goods from other states, or processing credit card transactions typically satisfies this requirement.
FLSA violations carry significant penalties. Workers can recover unpaid wages plus liquidated damages equal to the unpaid amount, effectively doubling their recovery. Prevailing employees also recover attorney’s fees and costs, making it easier to find lawyers willing to take cases.
Portal-to-Portal Act
The Portal-to-Portal Act amended the FLSA to clarify when travel time and preliminary/postliminary activities must be paid. The Act establishes that employers must pay for work that is integral and indispensable to the employee’s principal activities.
This law addresses off-the-clock work issues. If an activity is necessary to the job and primarily benefits the employer, it’s compensable time. Donning required protective gear, booting up essential computer systems, and attending mandatory meetings typically must be paid.
Davis-Bacon Act and Service Contract Act
The Davis-Bacon Act requires contractors on federal construction projects to pay locally prevailing wages. The Service Contract Act requires contractors providing services to the federal government to pay specified wages and benefits.
These laws prevent wage theft on federal projects and ensure workers on government contracts receive fair pay. Violations mean contractors paid less than required wages—stealing the difference from workers.
Anti-Retaliation Protections
Federal law prohibits employers from retaliating against employees who complain about wage theft, file claims, or participate in investigations. Retaliation can include firing, demotion, reduced hours, pay cuts, or creating a hostile work environment.
Retaliation is independently illegal even if the underlying wage claim lacks merit. If you file a good-faith wage complaint and your employer fires you in response, you have a retaliation claim regardless of the original claim’s outcome.
Source: DOL FLSA Overview
How to Recognize Wage Theft
Many workers don’t realize wage theft is occurring. Watch for these warning signs:
Red Flags of Wage Theft
Paycheck inconsistencies:
- Pay amounts vary significantly between similar pay periods without explanation
- Hours on paystubs don’t match hours you actually worked
- Paystubs show automatic meal deductions every shift
- No paystubs provided at all
Time recording issues:
- You’re told not to clock in for certain work tasks
- Manager regularly edits your time records downward
- Time clock is inaccessible when you arrive or before you leave
- No time tracking system exists
Off-the-clock expectations:
- Required to attend unpaid meetings or training
- Expected to answer calls or emails outside scheduled hours without compensation
- Required to complete opening or closing tasks before clocking in or after clocking out
- Manager instructs you to work through breaks but take the break deduction
Classification concerns:
- Labeled independent contractor but work like an employee
- Called a manager but perform no supervisory duties
- Paid salary but work substantially more than 40 hours with no overtime
- Everyone in the company is “exempt” from overtime
Payment problems:
- Paychecks bounce or payment is frequently late
- Paid cash with no pay records provided
- Deductions you didn’t authorize appear on paystubs
- Promised bonuses or commissions never materialize
- Final paycheck withheld after termination
Documenting Wage Theft
If you suspect wage theft, document everything:
Keep personal time records: Maintain your own log of start times, end times, and break times. Note dates, times, and duties performed. Take photos of time clocks showing your clock-in/clock-out times.
Save all pay records: Keep every paystub, payment record, and direct deposit confirmation. If your employer doesn’t provide paystubs, note payment dates and amounts.
Preserve communications: Save emails, text messages, or other communications about your schedule, hours worked, pay rate, or job duties. Screenshot digital communications that might disappear.
Photograph evidence: Take pictures of workplace notices about pay rates, policies, or schedules. Photograph timekeeping systems, work schedules, or supervisor instructions about time recording.
Record verbal statements: After verbal conversations about pay, wages, or hours, send a confirmation email: “This confirms our conversation today where you stated [summary of conversation].”
Calculate what you’re owed: Compare your actual hours worked to hours paid. Calculate what your pay should have been under federal and state law. Note specific instances of unpaid time, denied overtime, or illegal deductions.
This documentation becomes crucial evidence if you file a complaint or lawsuit. Even rough records help, especially when employers failed to keep required records.
How to Report Wage Theft Federally
You have multiple options for reporting wage theft and recovering stolen wages at the federal level.
Filing a Complaint with the Department of Labor
The U.S. Department of Labor’s Wage and Hour Division (WHD) investigates FLSA violations. Filing a WHD complaint is free and doesn’t require an attorney.
How to file:
Online: Submit a complaint through the DOL website at www.dol.gov/agencies/whd/contact/complaints
Phone: Call 1-866-4US-WAGE (1-866-487-9243) to speak with a WHD representative
In person: Visit any WHD district office during business hours
By mail: Send a written complaint to your nearest WHD office
What to include in your complaint:
- Your name, address, phone number, and email
- Employer’s name, address, and phone number
- Type of work you perform or performed
- How and when you’re paid
- Description of the wage violation
- Approximate dates of violations
- Any supporting documentation
The WHD Investigation Process
After receiving your complaint, WHD decides whether to investigate. Priority goes to cases affecting multiple workers, involving significant amounts, or showing patterns of violations.
Investigation steps:
- Initial review: WHD reviews your complaint and determines whether investigation is warranted
- Employer notification: WHD contacts your employer and requests payroll records
- Record examination: Investigators review time records, pay records, and employment policies
- Employee interviews: Investigators may interview you and coworkers about hours worked and pay received
- Violation determination: WHD determines whether violations occurred and calculates back wages owed
- Resolution: WHD seeks voluntary compliance, supervises back wage payment, or litigates if necessary
WHD investigations typically take several months. The agency does not have to reveal who filed the complaint, though employers often guess based on the investigation scope.
Remedies Available Through WHD
If WHD finds violations, the agency can secure various remedies:
Back wages: All wages you should have received, including unpaid minimum wage, unpaid overtime, and illegal deductions
Liquidated damages: An additional amount equal to back wages owed (can be reduced if employer shows good faith)
Civil monetary penalties: Up to $2,014 per violation for minimum wage and overtime violations; higher penalties for repeated violations
Injunctions: Court orders preventing future violations
Criminal prosecution: Willful violations can result in criminal charges, fines, and imprisonment
In fiscal year 2022, WHD recovered over $230 million in back wages for more than 190,000 workers nationwide.
Limitations of WHD Enforcement
WHD provides powerful enforcement but has limitations:
- WHD cannot award compensatory damages for pain and suffering
- WHD cannot reinstate employees or address wrongful termination
- WHD cannot address discrimination claims
- WHD prioritizes cases affecting many workers—individual cases may not be investigated
- WHD enforcement can be slow, taking months or over a year
For these reasons, many workers pursue private lawsuits instead of or in addition to WHD complaints.
Filing a Private FLSA Lawsuit
The FLSA allows workers to file private lawsuits to recover unpaid wages. Private lawsuits offer advantages over WHD complaints:
Broader remedies: Private lawsuits can include claims for wrongful termination, discrimination, or state law violations alongside wage claims
Faster resolution: Private litigation often resolves faster than WHD investigations
Attorney representation: Lawyers handle all aspects of the case and negotiate settlements
Liquidated damages: Automatic doubling of damages in most cases
Attorney’s fees: Prevailing employees recover attorney’s fees from employers, making contingency representation available
Class or collective actions: Workers can band together in collective actions to share costs and increase leverage
Finding an attorney: Many employment lawyers offer free consultations and work on contingency (no fee unless you win). The FLSA fee-shifting provision (employer pays your attorney’s fees if you win) makes it easier to find representation.
Statute of limitations: File within two years of the violation, or three years for willful violations. The clock runs from each instance of wage theft, so ongoing violations have rolling limitations periods.
Source: DOL How to File a Complaint
State Wage Theft Laws and Enforcement
Many states have wage theft laws stronger than federal protections. State laws may provide faster enforcement, higher penalties, and broader remedies.
State Advantages Over Federal Law
State wage theft enforcement often surpasses federal enforcement:
Criminal penalties: Some states prosecute wage theft as a crime, with potential jail time for employers
Faster administrative processes: State labor departments may resolve claims faster than WHD
Treble damages: Some states award triple damages for wage theft
Stronger retaliation protections: Enhanced penalties for retaliating against employees who report wage theft
No monetary minimums: States investigate individual cases regardless of dollar amounts
Specific industry protections: State laws targeting industries with high wage theft rates (restaurants, construction, domestic work)
State-Specific Wage Theft Guides
Every state has unique wage theft laws and enforcement mechanisms. Select your state below to learn about state-specific protections, reporting processes, and remedies:
West Coast States
- wages and hours
- Washington – Wages and Hours Hub – Department of Labor & Industries enforcement, double damages plus interest
- Oregon – Wages and Hours Hub – Bureau of Labor & Industries enforcement, civil penalties up to $1,000 per violation
Northeast States
- wages and hours
- Pennsylvania – Wages and Hours Hub – Wage Payment and Collection Law, criminal penalties for willful nonpayment
- Massachusetts – Wages and Hours Hub – Treble damages, Attorney General enforcement, criminal prosecution
Southern States
- wages and hours
- Florida – Wages and Hours Hub – Department of Economic Opportunity enforcement, criminal prosecution for pattern of violations
- Georgia – Wages and Hours Hub – Department of Labor enforcement, private right of action
- North Carolina – Wages and Hours Hub – Wage and Hour Act, criminal misdemeanor for wage violations
Midwest States
- Illinois – Wages and Hours Hub – Wage Payment and Collection Act, criminal prosecution, Department of Labor enforcement
- Ohio – Wages and Hours Hub – Prompt Pay Act, Attorney General enforcement, criminal penalties
Filing Both Federal and State Claims
You can file wage theft claims under both federal and state law simultaneously. This dual filing strategy offers advantages:
Maximum coverage: Different laws may cover different violations
Multiple enforcement agencies: Both state and federal agencies investigate
Strongest remedies: Receive benefits under whichever law provides greater protection
Backup if one fails: If one claim is dismissed, the other may proceed
File with both your state labor department and the federal WHD to ensure comprehensive enforcement.
Real-World Wage Theft Examples and Settlements
Understanding how wage theft occurs in practice helps recognize violations and appreciate potential recoveries.
Example 1: Restaurant Wage Theft Class Action
Situation: A national restaurant chain required servers to arrive 30 minutes before their shift to set up and attend pre-shift meetings but didn’t pay for this time. Servers also performed extensive closing work after clocking out. The restaurant automatically deducted 30-minute meal breaks every shift regardless of whether servers could take breaks.
Violations:
- Off-the-clock work (unpaid pre-shift and post-shift work)
- Meal break violations (automatic deductions for breaks not taken)
- Minimum wage violations (unpaid time reduced effective hourly rate)
Outcome: Class action lawsuit covering 40,000 workers resulted in $5.3 million settlement. Individual servers recovered $500-$3,000 depending on tenure. The restaurant agreed to policy changes ensuring all work time is recorded and paid.
Example 2: Retail Manager Misclassification
Situation: A retail company classified all store managers as exempt from overtime despite managers spending 80% of time on sales floor performing the same duties as hourly sales associates. Managers worked 50-60 hours weekly with no overtime pay.
Violations:
- Misclassification as exempt employees
- Unpaid overtime (10-20 hours weekly per manager)
- Failure to meet duties test for executive exemption
Outcome: Settlement of $14.5 million covering 1,400 managers. Average recovery of over $10,000 per manager. Company reclassified assistant managers as nonexempt and began paying overtime.
Example 3: Construction Worker Misclassification
Situation: A construction company classified framers, roofers, and laborers as independent contractors. Workers were required to use company tools, follow company schedules, work exclusively for the company, and had no opportunity for profit or loss beyond their hourly rate.
Violations:
- Misclassification as independent contractors
- Unpaid overtime (workers regularly exceeded 40 hours weekly)
- Unpaid minimum wage (some workers’ per-job pay fell below minimum wage when divided by hours worked)
Outcome: Department of Labor investigation resulted in $1.2 million in back wages for 200 workers. Workers reclassified as employees, making them eligible for unemployment insurance, workers’ compensation, and overtime pay going forward.
Example 4: Healthcare Aide Time Shaving
Situation: A home healthcare company used electronic timekeeping that automatically rounded time entries. The system was configured to always round down for clock-ins and round up for clock-outs, systematically shaving 15-30 minutes per shift. Aides also weren’t paid for travel time between patient homes despite this being required work time.
Violations:
- Biased time rounding favoring employer
- Unpaid work time (travel between locations)
- Minimum wage violations for some workers
- Overtime violations when unpaid time pushed workers over 40 hours
Outcome: Class action settlement of $3.8 million for 2,500 workers. Company reprogrammed timekeeping system to round neutrally and began paying for inter-client travel time.
Example 5: Warehouse Donning and Doffing
Situation: A warehouse required workers to arrive early to put on required safety gear (steel-toed boots, hard hats, safety vests, gloves) before clocking in. Workers also had to pass through security screenings after clocking out. These processes took 10-15 minutes at each end of the shift.
Violations:
- Unpaid preliminary activities (donning required gear)
- Unpaid postliminary activities (security screening)
- Violation of Portal-to-Portal Act (these activities are integral and indispensable)
Outcome: Settlement of $7.2 million covering 12,000 current and former workers. Warehouse adjusted policies to allow workers to clock in before donning gear and clock out after security screening.
These cases demonstrate that wage theft affects workers across industries and income levels. Remedies can be substantial, especially when violations affect many workers over extended periods.
Preventing Wage Theft: Know Your Rights
Understanding your rights helps prevent wage theft and recognize violations when they occur.
Your Core Federal Wage Rights
Right to minimum wage: You must receive at least $7.25 per hour (or higher state minimum) for all hours worked
Right to overtime: Nonexempt employees must receive 1.5x regular rate for hours over 40 per week
Right to payment for all work: Every minute your employer requires or permits you to work must be paid
Right to accurate records: Your employer must keep accurate records of hours worked and wages paid
Right to paystubs: While federal law doesn’t require paystubs, your employer must maintain records you can access
Right to file complaints: You can file complaints with WHD or file lawsuits without employer retaliation
Right to discuss wages: The National Labor Relations Act protects your right to discuss wages with coworkers
What Employers Cannot Do
Federal law prohibits employers from:
- Paying less than minimum wage (with limited exceptions)
- Refusing to pay overtime to nonexempt employees
- Requiring off-the-clock work
- Making illegal paycheck deductions that reduce pay below minimum wage
- Misclassifying employees to avoid wage obligations
- Retaliating against workers who report wage theft
- Destroying or failing to maintain required payroll records
- Requiring employees to waive FLSA rights
What You Can Do to Protect Yourself
Keep personal records: Maintain your own time logs showing hours worked, breaks taken, and duties performed
Review every paystub: Check that hours and pay rates are correct; calculate your own pay to verify accuracy
Know your classification: Understand whether you’re nonexempt or exempt and whether that classification is correct
Document everything: Save all employment documents, pay records, and communications about your pay or hours
Report violations promptly: Don’t wait—statutes of limitations can bar recovery for older violations
Consult an attorney: Many employment lawyers offer free consultations and can evaluate whether you have claims
Join with coworkers: Collective or class actions share costs and increase leverage against employers
Frequently Asked Questions About Wage Theft
What should I do if my employer is stealing my wages?
Document the violations by keeping detailed records of hours worked and pay received. File a complaint with the Department of Labor’s Wage and Hour Division, your state labor department, or both. Consult an employment attorney to discuss filing a lawsuit. Act quickly because statutes of limitations restrict how far back you can recover wages.
Can my employer fire me for reporting wage theft?
No. Federal law prohibits retaliation against employees who file wage complaints, participate in investigations, or assert wage rights. If your employer fires, demotes, or punishes you for reporting wage theft, you have an independent retaliation claim. Document the retaliation and consult an attorney immediately.
How far back can I recover stolen wages?
Under federal law, you can recover wages for violations occurring within two years, or three years for willful violations. Many states allow recovery for longer periods—three, four, or even six years. File claims as soon as possible to maximize recovery.
Do I need a lawyer to recover stolen wages?
Not necessarily. You can file complaints with the Department of Labor or state agencies without a lawyer. However, attorneys often recover higher amounts through negotiation or litigation, can address related claims like wrongful termination, and work on contingency (no fee unless you win). Most employment lawyers offer free consultations.
What if my employer claims I’m an independent contractor?
Your employer’s classification doesn’t determine your legal status. Federal law uses economic reality tests focusing on control, integration, and permanency. If you work like an employee, you’re entitled to employee protections regardless of what your employer calls you. Consult an attorney to evaluate your classification.
Will I get in trouble if I accepted cash payments off the books?
No. Employees are never penalized for accepting whatever payment their employer provided, even if it violated tax laws or reporting requirements. Those are employer obligations. You have the right to recover all wages owed under federal law regardless of how you were paid.
Can wage theft be prosecuted as a crime?
Under federal law, willful FLSA violations can be prosecuted criminally, though this is rare. Many states have specific wage theft criminal statutes and actively prosecute employers who systematically steal wages. Civil remedies (back wages and damages) are more common than criminal prosecution.
Take Action Against Wage Theft
Wage theft is illegal, harmful, and far too common. If your employer is stealing your wages, you have powerful legal tools to fight back and recover what you’re owed.
Start by documenting violations. Keep detailed records of your hours, pay, and any evidence of wage theft. The more documentation you have, the stronger your case.
File complaints with enforcement agencies. The Department of Labor’s Wage and Hour Division investigates wage theft for free. Your state labor department may provide faster or stronger enforcement. File with both to maximize protection.
Consider consulting an employment attorney. Many lawyers offer free consultations and work on contingency, meaning you pay nothing unless you win. Attorneys can recover higher amounts, address related claims, and handle all litigation aspects for you.
Don’t wait. Statutes of limitations restrict how far back you can recover wages. The sooner you act, the more money you can recover and the fresher your evidence will be.
Wage theft is not a minor issue or a civil disagreement. It’s illegal, it’s wrong, and the law provides strong remedies. You earned those wages. Federal law says you must be paid. Fight for what’s yours.
Get Help Recovering Stolen Wages
If your employer has committed wage theft, you may be entitled to back pay, double damages, and attorney’s fees. Get a free case review from an employment law expert who can evaluate your claim and explain your options for recovery.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. Employment laws vary by state and change frequently. For advice specific to your situation, please consult with a licensed employment attorney in your state. Employment Law Aid is not a law firm and does not provide legal representation.