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Record Number of Employees Accusing Employers of Wage Theft

Sep 5, 2014

State and federal officials report that record numbers of employees nationwide are filing lawsuits accusing employers of violating minimum wage and overtime laws, and practices such as erasing hours worked or wrongfully taking employees’ tips. “Wage theft” has become increasingly common, worker advocates say.

Officials say more employers are flouting wage laws, though business groups contend that officials may be overly zealous in pursuing enforcement actions, perhaps to gain favor with unions, according to The New York Times.

A federal appeals court in California recently ruled that FedEx had in effect committed wage theft by classifying its drivers as independent contractors rather than employees. Although many drivers are required to work 10-hour days, FedEx does not pay them overtime, which is required only for employees, according to the Times. In another recent action, California’s labor commissioner ordered the janitorial company employing 41 supermarket cleaners to pay the employees $332,675 in back pay and penalties. The company had forced workers to sign blank time sheets and then recorded fewer hours than the employees actually worked.

David Weil, who heads the federal Labor Department’s wage and hour division, says greater use of franchise operators, subcontractors and temp agencies has had a negative an impact on wages while at the same time allowing companies to deny knowledge of wage violations because they do not pay the workers directly. Since 2010, Weill said, the Labor Department has discovered nearly $1 billion in illegally unpaid wages, according to the Times. The victimized workers were disproportionately immigrants, Weill said.

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