Wage Theft Increasingly Common and Costly to American Workers - The Lyon Firm

Wage Theft Increasingly Common and Costly to American Workers

Labor Code Violations Cost American Workers Billions

Each year employers cheat thousands of American employees out of earned wages, often in vulnerable, low-wage positions in a phenomenon known as “wage theft”. Workers and labor attorneys allege thousands of cases of unpaid work, unpaid overtime, failure to provide meals and rest breaks, and off-the-clock work.
These cases often result in civil settlements or verdicts, as well as in back wages and penalties mandated by the U.S. Department of Labor (DOL). The DOL estimates wage and hour paid settlements since January 2007 have totaled over $3.6 billion from over 600 class action cases.
In 2014, companies paid on average $5.3 million to resolve a wage and hour case.

Joe Lyon is a highly rated Ohio lawyer representing plaintiffs nationwide in a wide variety of workplace claims.  

Most Common Types of Wage Theft Violations

Unpaid overtime is the most commonly reported labor violation but it is only one of several complaints. Many reported cases include multiple allegations. In fact, about 60 percent of reported cases had at least two allegations.
Other violations include the following:

  • Off-the-clock work performed
  • Minimum wage violations
  • Donning and doffing violations (unpaid time for changing into work clothes)
  • Missed meals
  • Missed required breaks
  • Misclassification of employee status
  • Tip pooling

What is an Employer Violation of Overtime Pay?

Federal and state law requires private employers to pay overtime at 1.5 times (time and a half) the regular hourly rate for all time worked over 40 hours in a “workweek.” A workweek is determined by the start of the employer’s payroll period.
Under state law, private employees covered by collective bargaining agreements or “uncoerced” compensatory time requests can be paid compensatory time in lieu of overtime.
Work actually performed is work that must be paid, regardless of a “no overtime” policy or requirement for prior approval of overtime or work after hours. Employers cannot expect or allow hourly employees to perform unpaid work.
In some cases, duties performed “off the clock” are compensable, and may require regular or overtime compensation. Examples may include time spent cleaning up, changing uniforms, preparation or cleaning of equipment, or closing out a cash drawer.

Wage Theft Common in Specific Industries

The industries that account for the majority of wage violations include the following:

  • Retail
  • Food services
  • Finance
  • Insurance
  • Construction
  • Garment Manufacturing

Major retailers, including Staples, Walmart and Levi Strauss have agreed to large settlements to pay back wages to workers after failing to pay overtime.
The Wage and Hour Division of the U.S. Department of Labor reported in 2012 that of more than 1,800 restaurant investigations, it found violations in over 70 percent.
Fast food restaurants have had a bad track record of wage theft in recent years. Franchises of McDonald’s, Subway, Dunkin’ Donuts, and Domino’s Pizza have all been cited for labor violations, such as failing to pay employees for all hours worked.

Recent Wage Settlements

  • Brinker Restaurant Corp. paid $56.5 million in a case that included 108,000 workers who alleged wage and hour violations.
  • The City of Los Angeles paid $26 million to settle a case that included over 1,000 trash truck drivers who alleged meal and rest break violations.
  • Walgreen Co. settled a case for $23 million after 40,000 workers alleged they were denied overtime and meal and rest breaks.
  • Schneider Logistics Transloading and Distribution Inc. paid $21 million after employees were denied overtime and minimum wage.
  • The San Francisco Giants baseball club paid more than $500,000 in back wages to dozens of clubhouse and administrative workers that had not received minimum wage and overtime pay.
  • Farmers Insurance agreed to pay more than $1.5 million in back wages to nearly 3,500 call center employees after federal authorities discovered ‘’significant and systemic” violations  of overtime and record-keeping rules.

Legal Representation

heater fan defect lawyer

If you have experienced a wage dispute in the workplace and have questions about the legal options available, contact The Lyon Firm (800) 513-2403. You will speak directly with Mr. Lyon, and he will help you answer these critical questions.

Contact us today.