Wage theft is a violation of the federal Fair Labor Standards Act of 1938.
Types of wage theft include:
- Unpaid overtime
- Payment below the legal minimum wage
- Misclassification of a workers status
- Illegal deductions
- Injured workers pressured not to file for worker’s compensation
- Threats of being fired, being reported to immigration services, denied sick leave or vacation time.
- Stolen tips
Among US born workers,
15% have experienced minimum wage violations
68% have experienced overtime violations
67% have experienced working “off the clock”
The average US born worker lost $51 per week, out of $339 in earnings which translates to $2,634 annually of true annual earnings of $17,616
Among documented immigrants,
21 % have experienced minimum wage violations
67 % have experienced overtime violations
68 % have experienced working “off the clock”
Among undocumented immigrants,
37% have experienced minimum wage violations
84 % have experienced overtime violations
76 % have experienced working “off the clock”
Of those who made complaints, 62% experienced one or more forms of illegal retaliation such as threatening to contact immigration authorities, firing or suspending worker or threatening to cut pay.
Chicago Center for Urban Economic Development
Nationally it is estimated that workers are not paid at least $19 billion every year in overtime and that $40 billion to $60 billion is not paid due to all forms of wage theft. This compares to national annual losses of $340 million due to robbery, $4 billion due to burglary, $5 billion due to larceny, and $3 billion due to auto theft.
Economic Policy Foundation
The Wage & Hour Division (WHD) of the Department of Labor is responsible for investigating complaints about wage theft. There is often a backlog of cases and typically there is a waiting time of about 6 months. However, under the Fair Labor Standards Act, the statute of limitations for wage theft is “2 years from the date of the employer’s failure to pay correct wages.”
The Illinois Department of Labor receives 5,500 wage claims a year and recovers about $5 million.
The minimum wage in Chicago is currently $10.50 an hour. However it is going up .50 every year until 2020 when it will be the rate of inflation.
July 1, 2017 = $11.00
July 1, 2018 = $11.50
July 1, 2019 = $12.00
July 1, 2020 Rate of inflation
A recent study of 1,140 low wage workers in Chicago and suburban Cook County, found that nearly 50% had experienced at least 1 pay related wage violation in the previous workweek. On average they lost 16% of their earnings. Applied to the whole population of low wage workers, this translates to over $7 million in lost wages each week.
The Center for Urban Economic Development at the University of Illinois
Los Angeles has the highest wage theft in the country — an estimated $26 million a week or $1.4 billion a year. Even if a worker wins a case against an employer, only 17% receive any payment.
Los Angeles Coalition Against Wage Theft