Record Number of Cases Accusing Employers of “Wage Theft”

Record numbers of employees across the country are filing lawsuits accusing their employers of violating minimum wage and overtime laws, or erasing work hours or wrongfully taking employees’ tips. Such practices, known as “wage theft,” have become increasingly common, worker advocates say.

State and federal officials report that more companies are violating wage laws than ever before, and they note the record number of enforcement actions they have pursued, The New York Times reports.  Officials say more employers are flouting wage laws, though business groups counter that officials may be overzealous in enforcement actions, perhaps to gain favor with unions.

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 work 10 hours a day, FedEx does not pay them overtime, which is required only for employees, according to the Times. California’s labor commissioner recently ordered a janitorial company to pay $332,675 in back pay and penalties to 41 supermarket cleaners. The company forced workers to sign blank time sheets and then recorded minimal and often inaccurate work hours for the cleaners.

David Weill, director of the Labor Department’s wage and hour division, says greater use of franchise operators, subcontractors and temp agencies has an impact on wages while allowing companies to deny knowledge of wage violations because they do not pay the workers directly. According to the Times, the Labor Department has uncovered nearly $1 billion in illegally unpaid wages since 2010. Victimized workers were disproportionately immigrants, Weill said.