$50 billion stolen annually from low wage workers due to wage theft

A new report released by the Economic Policy Institute (EPI) estimates that workers are robbed of approximately $50 billion annually due to wage theft.

The findings of the report use data from the U.S. Department of Labor, a survey of state attorney generals and labor departments, and a report on civil and private litigation and class action settlements.

Regarding the findings, one of the authors, EPI labor counsel Celine McNicholas, says, “Wage theft is a growing and pervasive problem that robs workers of billions of dollars every year. McNicholas also states that, “. . . Little progress has been made to address this epidemic. State and federal enforcement agencies often lack adequate resources to effectively deter employers from violating existing protections and it is increasingly harder for workers to successfully file private claims as they are forced to sign-away their right to go to court as a condition of employment.”

Although there are many forms of wage theft, which include overtime violations, tipped minimum violations, and employee misclassification, the report finds minimum wage violations to be one of the most common forms of wage theft, affecting 17 percent of low-wage laborers working in the 10 most densely populated states. Findings calculate that these workers are robbed of approximately $64 each week, totaling $3,300 each year.

The report also finds that despite the fact that wage theft is against the law, legal protections of workers are seldom enforced. One reason for this low enforcement rate is that, as of 2016, the Department of Labor’s Wage and Hour Division only had about 1,000 investigators looking into 7.3 million workplaces. The study concluded that this means that “The probability of any specific workplace being investigated for wage theft in a given year is around 0.01 percent.”

Read the full report here.

 

 

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