“Wage theft” sounds serious. If you’re like most victims of wage theft in Ohio and around the country, you may not even realize that’s what’s happening to you. You probably don’t know your legal rights, or that you may be able to recover those stolen wages and perhaps additional damages.
We’d all like to think wage theft is relatively rare. But, data from Policy Matters Ohio tells us that’s not true. The non-profit policy research institute says Ohio employers steal from about 213,000 workers each year. The amount stolen from Ohio workers through labor law violations varies significantly, but averages about $55/week per victim. Across a year of work, that’s more than $2,800.
What is Wage Theft?
In simple terms, wage theft occurs when an employer doesn’t pay an employee everything the employee is owed. This can happen in a variety of different ways, including not paying for all time worked and not paying the agreed or legally-mandated rate for the time worked.
Who is Impacted by Wage Theft?
Wage theft can happen to anyone. Wage theft occurs across a wide range of industries, from agriculture and construction to professional services and the financial sector. But, some workers are more likely to be cheated out of their wages than others. For example, more women than men are victims of wage theft in Ohio. And, while white workers make up the largest share of those subjected to wage theft, some racial minorities are disproportionately likely to suffer wage theft. Specifically, Hispanic workers are 74% more likely to be victims of wage theft than white employees, and Asians 51% more likely than whites to have their wages stolen.
One of the most significant variables determining how likely an employee is to suffer wage theft is income level. Though less than 4% of Ohio workers are affected by wage theft, that number jumps to more than 18% for workers earning $11.44/hour or less. In other words, Ohio employers are most likely to steal from the workers who can least afford to lose out on earnings.
The leisure and hospitality industry leads the pack, with more than 108,000 employees experiencing wage theft. That’s more than half of wage theft victims across all industries.
6 Common Types of Wage Theft
Wage theft can happen in many different ways. Here are some of the most common ways Ohio employers unlawfully underpay their employees.
- Not paying for all hours worked. One common way employers avoid paying their workers for every hour worked is to require employees to stay until certain tasks are completed, but pay them only until the end of the scheduled work day. Employers sometimes get away with this by making employees feel like it’s their own fault if they can’t get the work done by the scheduled time to clock out, or by asking employees to “volunteer” to help with certain tasks off the clock. With very few exceptions, both are illegal.
- Non-payment of overtime. Some employers may pay for all hours worked, but pay them all at the regular hourly rate. The federal Fair Labor Standards Act (FLSA) requires employers to pay 1.5 times the employee’s regular hourly rate for all time in excess of 40 hours worked in a single week. For example, an employee who normally earns $15/hour and works 45 hours in a week must be paid $15/hour for the first 40 hours and $22.50 for each of the remaining five hours. If an employee works this schedule regularly and the employer pays straight time for all hours, the worker loses out on $52/week, or nearly $2,000/year.
- Misclassifying employees as independent contractors. A contractor isn’t entitled to the same legal protections as an employee, meaning that the company doesn’t have to pay overtime wages, or even pay minimum wage. But, simply calling an employee a contractor doesn’t make it so, and a misclassified worker who should have been entitled to higher wages or overtime pay may be entitled to back wages. Generally, if you are working for a single employer and they are controlling things like work hours and how you do your job, you may be improperly classified.
- Misclassifying employees as exempt from overtime. Not all employees are entitled to overtime pay. Some employers try to treat all salaried employees as exempt, and to put employees on salary and give them titles like “assistant manager” so they can require these workers to put in extra hours–often well beyond 40 hours/week–without any additional pay. But, only certain employees are legally classified as exempt. The fact that you receive set weekly pay or have a title doesn’t necessarily mean you aren’t entitled to overtime pay. If you’re unsure of whether you should be receiving overtime pay, read How Do I Tell If I’m Exempt from Overtime Pay in Ohio?
- Tipped minimum wage violations. The minimum hourly wage an employer must pay to a tipped employee is lower than the standard minimum wage, since that employee receives part of their income from tips. What many tipped employees don’t know (and many businesses that employ them don’t acknowledge) is that the employer is required to make up the difference if tips don’t bring the employee up to minimum wage. If the employer confiscates tips, forces tip sharing in a way that drops the employee below minimum wage, or fails to make up the difference when tips don’t close the gap, they may be violating the law.
- Illegal deductions. While the other types of wage theft described here all involve underpayment or failure to pay, this one is different. Both federal and Ohio state law limit the reasons an employer may make deductions from an employee’s pay. And, even if the deduction itself is permissible, the employer can’t make deductions that would drop the employee’s effective pay below the minimum wage.
Remedies for Wage Theft in Ohio
The exact compensation available for wage theft in Ohio depends on the type of violation, and on whether the action violates federal law, Ohio state law, or both. Often, the employee is entitled to more than the unpaid wages. For example, under federal law, an employee who lost income to minimum wage violations or overtime violations may recover the amount lost plus “a like amount” in liquidated damages–in simple terms, twice the amount they were cheated out of.
To learn more about whether you may have been the victim of wage theft and the remedies available to you, call 937-222-2222 right now, or fill out the contact form on this page.