Businesses have a legal obligation to uphold their agreements with employees. Businesses must abide by the contracts that they sign with workers and must also comply with federal and state employment laws. There are clear rules requiring certain types of conduct from businesses, but workers still sometimes find themselves dealing with frustrating violations of their rights. Wage theft is one of the most common and consequential violations that businesses commit.
Researchers estimate that workers lose out on billions of dollars in wages in the United States each year because companies do not abide by wage and hour laws. Workers who identify wage theft can hold businesses legally accountable. The following are some of the warning signs of increased wage theft risk.
Management seeking to reduce payroll costs
It is common for large retail businesses, restaurants and other service-based companies who have estimates for staffing that management must follow. The company will look at the prior year’s sales at the same time to determine how many staff members the business will likely need on any given day. General managers and others tasked with scheduling workers often receive incentive bonuses for using fewer hours than the company estimates will be necessary. Situations in which there is an incentive to reduce the total number of billable staff hours lend themselves to misconduct that might constitute wage theft.
A no-overtime policy
When a company has hourly workers, its employees will be non-exempt for the purpose of overtime pay. Simply put, the company will usually need to pay more in wages for hours worked past the 40th. Companies may try to trick workers into giving up compensation for the time that they have worked by claiming they didn’t follow the right process for overtime pay. Sometimes, managers or human resources professionals will even alter time clock records to remove someone’s overtime so that the company doesn’t have to pay them in full.
Questionable training practices
Businesses often sidestep wage responsibilities by integrating wage theft into the company culture. For example, a restaurant hires new servers or hosts and then trains them to do certain work before they clock in or after they clock out. Requiring cleaning or any other routine job tasks without pay is a very common form of wage theft. Workers may feel like they cannot speak up if everyone else at the company already accepts those conditions. However, coercing workers to clock out before cleaning up or to do prep work before clocking in is a common and inappropriate practice.
Documenting how a company has violated the wage rights of workers is an important first step toward fighting back against those illegal practices. Seeking legal guidance accordingly is as well.