Labor & Employment

Is wage theft by employers increasing?

Labor officials and business groups disagree on whether wage theft is increasing in the United States.

A “flood of recent cases” claim employers are cutting costs and increasing profits by failing to pay overtime, minimum wage or full hours worked, the New York Times reports. Enforcement actions are at record levels, leading some to conclude that more employers are violating labor laws by underpaying their workers.

David Weil, the leader of the U.S. Labor Department’s wage and hour division, says some of the wage theft is by subcontractors, franchisees and temp agencies hired by big companies, which can then deny knowledge of labor violations.

“We have a change in the structure of work,” Weil told the Times, “that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law.”

Business groups say increased enforcement actions are the result of government officials trying to curry favor with labor. And some lawsuits may be driven by efforts to secure higher wages for workers, they say.

If anything, employers are becoming more careful about complying with labor requirements, according to Lee Schreter, co-chair of the wage and hour practice group at Littler Mendelson. Suits are being filed, Schreter said, in hopes of a big payoff. “These are opportunistic lawsuits,” she told the Times.

Prior coverage:

ABA Journal: “Do janitorial firms cash in by misclassifying workers as independent contractors? “ ‘Seismic’ 9th Cir. rulings nix FedEx claim its drivers aren’t employees, could cost company millions”

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