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Aug 24, 2023 | Nancy Chen and April Xu

What Is Wage Theft?

Wage theft is estimated to cost workers over $15 billion a year in the U.S., the Wage Theft Prevention and Wage Recovery Act finds. It disproportionately affects women, immigrants and minorities. Foreign-born workers are almost two times as likely to experience minimum wage violations as their U.S.-born counterparts, and African Americans are three times more likely to experience minimum wage violations than their White counterparts.

Also Read: 127,000 New York Workers Have Been Victims of Wage Theft

In this article, you will find out what wage theft is and some regulations that protect workers from wage theft.

Documented published original investigation with ProPublica which found that the New York Department of Labor (DOL) recorded at least $126 million in stolen wages between 2017 and 2021. This article is part of Documented’s series on workers’ rights and wage theft.

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What is minimum wage?

The federal minimum wage for covered nonexempt workers is $7.25 per hour effective July 24, 2009, which is established by The Fair Labor Standards Act (FLSA)

For tipped employees, defined as those regularly receive more than $30 per month in tips, employers must pay them $2.13 per hour. However, note that employers must make up the difference if the amount of tips plus the $2.13 is less than $7.25 per hour.

You can search up the minimum wage in your state using this tool by the U.S. DOL.

In New York State, the minimum wage as of Dec. 31, 2022, is $15 per hour for New York City, Long Island and Westchester residents, and $14.20 for the residents in the remainder of the state. The minimum wage for home care aides is $2 per hour above the basic minimum hourly rate effective Oct. 1, 2022.

If the employee works for over 40 hours in a week, they should receive premium pay, which is 1.5 times the worker’s regular rate, for each hour worked beyond 40.

What is the definition of wage theft? 

Wage theft happens when an employer fails to pay an employee for work that the employee has performed, depriving the worker of earnings to which he or she is legally entitled, according to the Wage Theft Prevention and Wage Recovery Act.

In New York State, the Wage Theft Prevention Act (WTPA) that took effect in 2011 provides an important legal basis for protecting workers’ rights. Workers have to get pay notices at the time of hire and when there are changes in the information on the pay notices and proper wage statements. Workers are also protected from retaliation after filing complaints about potential labor law violations.

The pay notice must include: 

  • Rate or rates of pay, including premium pay (if applicable)
  • The frequency of pay (by the hour, shift, day, week, commission, etc.)
  • Regular payday
  • Official name of the employer and any “doing business as” names
  • Address and phone number of the employer’s main office or principal location
  • Allowances taken as part of the minimum wage (tips, meal and lodging deductions)

Also Read: NYS Department of Labor Fails to Recover $79 Million in Stolen Wages

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