Employers have a legal obligation to pay their hourly employees for all the hours they work. Some employers find ways to avoid paying wages that are due. Employment lawyers refer to those practices as “wage theft.”
“Wage theft” isn’t necessarily a crime. Courts usually view wage theft as a civil matter. Failing to pay promised wages is a breach of contract. Failing to pay minimum wage and overtime is a violation of federal law. Florida also has a minimum wage law that imposes civil penalties when employers fail to pay the wages they owe.
Examples of Wage Theft
Wage theft can occur in different ways. The most obvious example of wage theft is the failure to pay final wages. After being fired or laid off, some employees never see their last paycheck. The employer simply pockets the pay instead of forwarding it to the employee, particularly if the employee is only entitled to a day or two of wages.
Issuing a paycheck that bounces is a similar form of theft when the employer doesn’t make the check good. The failure to pay any of the wages earned during a pay period is both a breach of contract and a violation of minimum wage laws.
Another common example of wage theft occurs when employers require employees to keep working after the “clock out.” For example, a waitress might be told that she won’t be paid for time after her shift ends. Yet the employer might require the waitress to perform additional duties, such as sweeping the floor or preparing tables for the morning, after the end of her shift. Failing to pay the waitress for that work is a form of wage theft.
A variation of failing to pay for hours worked “off the clock” occurs when employers deduct time for meal breaks that are not taken or that are cut short. Some employers automatically deduct 30 minutes of pay for meal breaks even when they know that employees are working during part or all of the break. When an hourly employee needs to stay at a workstation to answer the phone while eating lunch, not paying the employee for the meal break often results in unpaid overtime.
Unlawful paycheck deductions can also be a way to steal wages. Blaming an employee for a cash shortage that never occurred, and withholding the shortage from the employee’s wages, is a blatant form of theft. Even when deductions are not unlawful, certain deductions can violate the law when they cause the employee to earn less than minimum wage during a pay period.
Employers often handle tips in a way that amounts to theft. As a general rule, tips belong to the employee, not the employer. Florida employers can require employees to contribute tips to a “tip pool,” but strict laws regulate those contributions. For example, the employer cannot take a share of the pooled tips. In most cases, a manager who participates in a tip pool is stealing tips. Tipped employees are among the most frequent victims of wage theft.
Employers can take a “tip credit” against minimum wage, but only if they follow the law. The “tip credit” reduces the hourly wage the employer must pay to the tipped employee, up to a maximum reduction that is set by law. In many cases, employers take an unlawful tip credit. For example, if a tipped employee spends substantial time performing work that does not earn tips (such as washing dishes), taking a tip credit is probably unlawful. Tip credit violations often cause employees to earn less than minimum wage.
Vehicle dealers and certain other businesses pay commissions in lieu of wages. Careful employers pay a hybrid of wages and commissions to assure that the salesperson receives minimum wage for each hour worked during a pay period. If commissions do not equal minimum wage, the employer adds additional pay to cover the difference.
Some employers refer to the minimum wage payment as a “draw” and deduct it from future commission payments. That system is not necessarily unlawful, but the way it is administered can result in salespersons earning less than minimum wage in certain pay periods. With the exception of outside sales positions (where salespersons are usually on the road, not on the sales floor), a failure to pay minimum wage in each pay period constitutes wage theft.
Some salaried employees are exempt from minimum wage and overtime laws. Those employees are not entitled to overtime if they work more than 40 hours in a week.
However, the overtime exemption only applies if the employee is legitimately classified as exempt. Calling a secretary an “executive assistant” doesn’t necessarily mean that the secretary meets the test of the executive employee exemption.
Employers too often claim that employees are exempt who do not meet the strict requirements for an exemption that are imposed by federal law. They deliberately misclassify employees to avoid paying the overtime wages that those employees have earned. Misclassification is a form of wage theft.
Remedies for Wage Theft
The victim of wage or tip theft can sue for unpaid wages. A Florida law allows employees to recover their attorney’s fees if they prevail in a lawsuit to obtain unpaid wages.
When wage or tip theft results in a failure to pay minimum wage or overtime, the employee has additional remedies. In addition to recovering unpaid wages, the employee is usually entitled to recover an equal amount as “liquidated damages.” That payment essentially punishes the employer for violating the law. Employees who prevail can also recover their attorney’s fees under federal law.
Employees do not need to wait until their employment ends before bringing a claim for wage theft. In fact, employees who wait too long may lose the opportunity to recover anything. Fortunately, a federal law protects employees from retaliation for making a claim for unpaid minimum wage or overtime. Employees who are fired or have their hours reduced after asserting their rights can seek additional remedies, including lost wages and damages for emotional distress.
An employment lawyer can review an employee’s history of wage payments and determine whether the employee has been paid all the wages the employee is owed. An employment lawyer can also take steps to protect the employee from retaliation when making a wage claim on the employee’s behalf. Nobody would tolerate having a thief break into their home every week to steal their property. By the same principle, no employee should tolerate wage theft.