3d_money_construction_dreamstime_xxl_21903206

An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year

Millions of Americans struggle to get by on low wages, often without any benefits such as paid sick leave, a pension, or even health insurance. Their difficult lives are made immeasurably harder when they do the work they have been hired to do, but their employers refuse to pay, pay for some hours but not others, or fail to pay overtime premiums when employees’ hours exceed 40 in a week.

This failure to pay what workers are legally entitled to can be called wage theft; in essence, it involves employers taking money that belongs to their employees and keeping it for themselves. Amounts that seem small, such as not paying for time spent preparing a work station at the start of a shift, or for cleaning up and closing up at the end of a shift, can add up.  When a worker earns only a minimum wage ($290 for a 40-hour week), shaving a mere half hour a day from the paycheck means a loss of more than $1,400 a year, including overtime premiums. That could be nearly 10 percent of a minimum-wage employee’s annual earnings-the difference between paying the rent and utilities or risking eviction and the loss of gas, water, or electric service.

(Read More)

(Issue Brief #385 – Download PDF)

Misclassification Robs Workers of Pay and Benefits, Hurts Honest Companies

News today on the misclassification of construction employees and recent court decisions in Oregon and California that FedEx’s employees are not independent contractors are reminders that misclassification of workers is rampant in this country and that misclassification hurts workers, honest companies, and government at every level.

“Companies have put more and more risk, responsibility, and cost on their employees-requiring employees to pay their own employment taxes, to do without worker’s comp coverage, to pay for their own uniforms, and to rent the tools they need to work,” said EPI’s Vice President Ross Eisenbrey, who has studied misclassification since the 1990’s. “Misclassification robs workers of fair pay and benefits, and contributes to an economy where wages are flat, profits are soaring, and CEOs and top brass get the lion’s share of pay increases. Meanwhile, the companies that do not arrange their business to avoid their employment responsibilities are disadvantaged. It’s not just bad labor practices, it is unfair competition.”

(Read More)