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5 kinds of wage theft

On Behalf of | Apr 1, 2023 | EMPLOYMENT LAW (EMPLOYEE) - Wage & Hour Laws

Workers deserve to be paid for their efforts. However, some employers take advantage of their position by stealing from their workers.

This is known as wage theft. Every worker in this nation should know how to spot this common problem so that they can protect their rights. Here are some of the ways it happens:

1. Paying less than minimum wage

Employees have a right to be paid minimum wage. The federal minimum wage is $7.25 an hour, but the Illinois minimum wage is much higher at $13 an hour starting in 2023. This is an increase from the previous $12 hourly minimum that lasted through 2022. 

If you regularly earn tips, then your minimum wage has gone up to $7.80, since tips are expected to take you to at least the state minimum of $13 hourly. Employers are expected to make up the difference if you aren’t able to do so with tips alone. It’s wise to keep an eye on your paycheck to make sure your employer is keeping up.

2. Not paying overtime

Employees who work over 40 hours a week should be paid overtime unless they are exempt. The overtime rate is one-and-one-half of their hourly wage. If you worked overtime and your paycheck doesn’t reflect the time, then your employer may be committing wage theft. 

3. Taking unlawful deductions

There may be times when an employer takes deductions from your paycheck, such as for health benefits or income taxes. However, an employer may take unlawful deductions, for example, when something breaks or a customer doesn’t pay. Employees often don’t have the right to take such deductions from their employees.

4. Misclassifying employees 

One simple trick employees can do to commit wage theft is by misclassifying their employees as independent contractors. This can allow an employer to avoid paying payroll taxes and other benefit costs.

5. Misclassifying non-exempt employees 

Another way employers can misclassify employees is by labeling non-exempt workers as exempt. Exempt workers don’t qualify for overtime. By doing so, employers may take advantage of their employees’ overtime work and not pay them for their efforts.

If you believe you’re a victim of wage theft, then you should be aware of your legal options.