Wage Theft Increases in 2012

This year has seen a record number of claims that employers are not paying employees the wages that they are entitled to. Employees are protected from wage theft by the Fair Labor Standards Act, and so far at least 7,064 claims have been filed under that law in 2012. To put this number in perspective, only about 2,000 claims were filed in 2002.

A large portion of these lawsuits are the result of misclassified employees, generally meaning those that are considered salaried that should be paid hourly and eligible for overtime.

Low wage workers are particularly vulnerable to this type of labor law violation since they are often not aware of their rights or if they are, they may be unable to hire an attorney. Especially for isolated cases for small amounts of money, it can be hard to enforce the law.

A Labor Department spokesperson said that they have recognized this widespread problem and have stepped up efforts to help workers in these situations get the pay they are entitled to. This has meant increasing litigation efforts when they are unable to settle out of court with employers.

Earlier this year the Labor Department aggressively pursued a claim against retail giant Walmart which eventually led to a $5 million settlement for unpaid wages and damages to 4,500 employees. The employees had lost wages when they were misclassified as exempt from overtime rules. The Labor Department said that employers nationwide should be warned that this is an unacceptable practice and that the department would continue to pursue these types of claims.

Source: MSNBC, "Growing number of workers complain about being shortchanged" Eve Tahmincioglu, July 26, 2012.