Millions of American workers lose nearly $8 billion each year in the nation’s 10 most populous states, including Florida, via what’s often referred to as “wage theft.”
What is wage theft?
Wage theft refers to what the name suggests: the theft of an employee’s wages.
The Fair Labor Standards Act, a federal law that took effect in 1938, outlines several employment laws pertaining to wages, including the creation of a federal minimum wage, overtime pay provisions, mandatory rest breaks, and more.
Employers do not forcefully take or confiscate wages from the employee per se. Wage theft is often more discreet and indirect and includes actions such as:
- Failing to pay overtime pay
- Failing to pay the minimum wage stipulated under the law
- Failing to pay workers for jobs done off-the-clock
- Refusing to pay workers for mandated break times
- Classifying workers as exempt in order to avoid paying overtime
- Failing to pay tipped workers their entitled pay under the law
- Taking illegal pay stub deductions
Who is affected most from wage theft?
According to the Economic Policy Institute (EPI), an organization that focuses on economic policies affecting low-income employees, wage theft impacts minimum wage and low-wage workers the most.
An EPI study shows full-time employees lose an average of $3,300 each year for violations including those noted above.
Upcoming concerns amid rise in Florida minimum wage
A new Florida law took effect this month, raising the state minimum wage to $10 per hour with a continued increased to $15 by 2026.
According to a 2021 study by the Florida Policy Institute and Rutgers University says, if left unchecked, wage theft will negate the intended benefits of the state’s gradual $15 minimum wage increase.
The study concluded several key takeaways including the following:
- Victims of wage theft lose on average $1.32 per hour in wage theft which is expected to rise with the new law.
- Workers in agriculture, real estate and the service industries are most affected.
- Black, Latina and immigrant women are most likely to experience wage theft.
- Roughly $25 million in state tax revenue is estimated to be lost in the upcoming years with continued violations.
Professor Janice Fine, director of research and strategy for Rutgers University’s Center for Innovation in Worker Organization (CIWO), notes how alarming it is that there are no inspectors to enforce the minimum wage in the state of Florida.
“How is it that Florida, a state of 10 million workers, employs no one to enforce the minimum wage? New York, with a million fewer workers, has 115 full-time state investigators,” she says. It’s not surprising, Fine indicates, that Florida has the highest rate of minimum wage violations in the nation.
It’s important to note that not all employers skirt the rules. However, such lack of supervision does question the honesty of many, particularly given the new stipulations with the minimum wage and economic conditions relating to COVID.
For employees concerned about their wages and possible wage theft, as well as businesses wanting to ensure compliance with wage laws, consulting with an experienced employment law attorney who can offer advice and guidance on the law is advised.