How much does wage theft cost workers?

On Behalf of | Jul 22, 2021 | Wage And Hour Claims |

Many companies that hire hourly workers micromanage the time of their employees. They often have all kinds of rules about time theft, including limits on how long a bathroom break can be. Some accuse their workers of doing personal things while on the clock and claim that these actions are tantamount to stealing from the company.

At the same time, thousands of companies every year intentionally deprive their workers of their hourly wages or overtime pay. These intentional, systemic abuses of worker’s wage rights are known as wage theft. Is wage theft really a big issue in an era with labor laws and digital time clocks?

Every year, employers keep billions of dollars that their workers should receive

A study by the Economic Policy Institute (EPI) estimates that wage theft just in the United States amounts to about $8 billion each year. At the macro scale, it can be hard to put $8 billion in wage theft in perspective, but that amount is half as much as all other forms of theft in the United States each year combined.

For some people, it will be easier to look at it on a more personal level. Each year, about 2.4 million workers lose income due to wage theft. If you average their losses, it probably means several hours of unpaid work each week. A worker will lose, on average, $63 per week. However, that adds up to $3,300 each year.

The obvious incentive for wage theft is a bigger profit margin for the company. Bringing a wage claim against the business when you discover wage theft could deter that business and others from stealing from their workers in the future.