American Workers Lose $15 Billion Each Year From Corporate Wage Theft

Each year U.S. employers cheat minimum-wage workers out of an estimated $15 Billion in pay — that’s according to a recent report from the Economic Policy Institute (EPI).

Wage theft is one of corporate America’s biggest crimes against its own workers, but, sadly, it is seldom discussed in popular conversation. The tragedy of wage theft results in harm to working families, taxpayers, and the U.S. economy.

Even worse? The biggest perpetrators of wage theft — large, often multi-million-dollar corporations — often get away scot-free, while many hardworking Americans suffer the consequences, unable to pay bills or put food on the table.

According to The Hustle, the $15 Billion in wages denied to workers each year amounts to more than all major annual property crimes in the U.S. combined. The EPI estimates that the total economic toll of wage theft could be as high as $50 Billion a year.

What Is Wage Theft?

Wage theft takes many forms, but it’s commonly defined as any employment scenario in which an employer fails in their legal responsibility to pay wages and/or benefits owed to an employee.

Some common examples of wage theft include:

  • Failing to pay workers minimum wage or higher
  • Failing to compensate workers for overtime hours
  • Failing to offer meal breaks to employees
  • Taking illegal paycheck deductions
  • Asking or requiring employees to work “off the clock”
  • Misclassifying full-time employees as contractors

No industry or line of work is completely safe from wage theft, though it occurs in higher frequency among America’s most vulnerable workers: low-wage earners who are often men and women of color. The food-service industry, for example, is one of the sectors most impacted by wage theft.

Other occupations commonly impacted by wage theft include:

  • Construction workers
  • Childcare workers
  • Parking attendants
  • Cashiers
  • Gas Station attendants
  • Janitors and maids

While the Fair Labor Standards Act (FLSA) was signed into law in 1938 during President Franklin D. Roosevelt’s second term, its effectiveness is waning in the 21st century as deregulation of the labor market steadily continues.

The FLSA was an attempt to correct a once-widespread employment dynamic that greatly favored employers and exploited low-wage employees.

What Is a FLSA Violation?

The FLSA governs federal minimum wage for workers, as well as overtime, record-keeping, and employment standards. An FLSA violation occurs when an employer fails to meet the requirements established in the law.

Such violations occur more frequently than you may think: Recently, in Florida, the U.S. Department of Labor (DOL) found that a Pensacola-based company that owns two 24-hour care facilities owed workers $93,932 in backpay. The DOL found that “employees working 16-hour days were paid for only 12 or 13 hours.”

This is a clear violation of the Fair Labor Standards Act.

Commenting on the case, Wage and Hour Division District Director Wildali De Jesus said,

“When employers fail to meet their obligations to pay essential workers all the wages they have earned it hits our lowest wage-earners the hardest, significantly impacting their ability to earn a living. Other employers in this industry should use the outcome of this investigation as an opportunity to review their own pay practices, ensure they comply with the law, and avoid violations like those found in this case.”

Unfortunately, this Pensacola case is but one of thousands each year.

How Corporations Abuse the FLSA

What is surprising to many is the prevalence with which wage theft occurs. In fact, it is one of the most common crimes committed by corporations every year — and there are far too many victims.

Corporations will often find and exploit loopholes in the law to avoid compensating employees.

Companies may outsource work to temp agencies or hire subcontractors to minimize their liabilities in cases of wage theft. Other companies may intentionally classify workers as independent contractors to avoid paying benefits and minimum wage.

Alongside corporations, trade organizations, such as the National Restaurant Association, spend tens of millions each year lobbying Congress to vote against raising the minimum wage.

Seeking Help for Wage Theft

Are you owed money? If you were a victim of wage theft, it’s important to seek legal help as soon as possible.

For more than 40 years, Sokolove Law has been fighting on behalf of workers — hardworking men and women who have been short-changed by powerful corporations with seemingly endless bankrolls.

To find out if you may be eligible for wage theft compensation, contact us today for a free, no-obligation legal consultation.

Author:Sokolove Law Team
Sokolove Law Team

Contributing Authors

The Sokolove Law Content Team is made up of writers, editors, and journalists. We work with case managers and attorneys to keep site information up to date and accurate. Our site has a wealth of resources available for victims of wrongdoing and their families.

Last modified: September 17, 2021

View 6 Sources
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  2. Crockett, Zachary. “How employers steal billions of dollars from workers every year.” The Hustle, 2021 July 31. Retrieved Sept. 9, 2021, from https://thehustle.co/how-employers-steal-billions-of-dollars-from-workers-every-year/
  3. Economic Policy Institute. “Employers Steal $15 Billion a Year From Workers by Paying Less Than the Minimum Wage.” 2017 May 10. Retrieved Sept. 15, 2021, from https://www.epi.org/press/employers-steal-15-billion-a-year-from-workers-by-paying-less-than-the-minimum-wage/
  4. Gangitano, Alex. “Business groups prepare for lobbying push against $15 minimum wage.” The Hill, 2021 Jan 26. Retrieved Sept. 12, 2021, from https://thehill.com/business-a-lobbying/535957-business-groups-prepare-for-lobbying-effort-against-raising-the-minimum
  5. Neal, David J. “Florida company got free labor by shorting healthcare workers $93,000 in pay, feds say.” Yahoo!finance, 2021 Aug. 16. Retrieved Sept. 10, 2021, from https://finance.yahoo.com/news/florida-company-got-free-labor-132036340.html
  6. U.S. Dept. of Labor. “Wages and the Fair Labor Standards Act.” Retrieved Sept. 10, 2021, from https://www.dol.gov/agencies/whd/flsa