Wage Theft Cost Workers $50 Billion in 2016

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In the world where a $1.5 trillion dollar budget deficit bill is being blithely pushed through Congress and at least one U.S. company is on a path to become the world’s first publicly traded firm valued at $1 trillion, $50 billion dollars is barely a rounding error.

That’s how much the Economic Policy Institute (EPI) estimates was stolen from low-wage workers in 2016 alone. Workers being paid less than minimum wage, for example, are losing an average of $3,300 a year and account for about $15 billion of lost wages.

The EPI conducted a study to determine how much of these losses workers were able to recover and it should come as no surprise that over two years (2015 and 2016) the total recovered was a scant $2 billion. In other words, stealing wages from workers is one case where crime really does pay.

In addition to minimum wage violations, employers in some cases also fail to pay for overtime, ask employees to work off-the-clock, deny required meal breaks, take illegal deductions from employees’ paychecks, confiscate tips, and misclassify employees as independent contractors in order to pay them lower wages and avoid paying overtime.

EPI noted:

These data make it clear that wage theft is a widespread epidemic across our economy and not merely the practice of a few unscrupulous employers. This systemic violation of our nation’s most basic principle of labor and employment policy—that working people should be paid what they are owed for their labor—requires immediate action. Lawmakers must institute policies that combat wage theft. These reforms are not complicated initiatives; rather, they are commonsense measures that advocates have advanced for decades.

Among EPI-recommended policies:

  • Raise the cost to employers for violating the law.
  • Improve transparency by ensuring that employees receive a statement showing hourly pay, hours worked and deductions.
  • Support strong government enforcement.
  • Protect workers from retaliation.
  • Protect workers’ right to class action.

The full EPI study is available at the organization’s website.