Nationwide, employers take an estimated $50 billion dollars out of their employees' wages every year.
That $50 BILLION. With a “B”.
In my experience, however, there are a number of jobs in which this “wage theft” occurs with more frequency.
Here is the top five countdown of the jobs which are most likely to make you a victim of wage theft.
5) Office Workers
Starting this list off is the generic office worker. I use this term amorphously to include all sorts of different white-collar job functions because they all suffer from the same problem: shoddy time-keeping.
Office environments generally have the habit of keeping regular business hours. Since the businesses themselves only operate during a particular window of the day, there is usually no real need to track the hours each employee works.
That means that if an office worker happens to come in early or leaves after close of business, this time will not be recorded.
With how paycheck systems typically work, if time is not recorded, it’s not going to be paid. So this arrangement is a recipe for wage theft.
Now I know what you’re thinking: “Mike, aren’t these careers typically salaried positions?” And you’d be right, a lot of office workers have jobs which their employers consider are “FLSA-exempt” employees, which means they can be paid a flat weekly rate for all hours worked (i.e., a salary) and thus don’t need to track their time. This brings us to the other problem typically affecting office workers: salaries for non-exempt employees.
As a general rule, employees can only be paid a salary for all hours worked in a week if (1) the job duties of the worker qualify for a particular exemption; and (2) the employee’s salary is above a certain level.
In an office environment, there are generally three exemptions under the FLSA (the Fair Labor Standards Act, the federal law which dictates how workers are to be paid): (1) the executive exemption; (2) the administrative exemption; and (3) the professional exemption.
For the executive exemption to apply, the worker must be (1) involved in the management of the business, such as directing the work of subordinates and having the authority to hire and fire; and (2) must be paid no less than $1,012.00 per week.
The administrative exemption is a tad more complicated. For it to apply, the worker must perform office work “directly related to the management or general business operations” of the employer and includes “the exercise of discretion and independent judgment with respect to matter so significance”. This legalese sound complicated? You betcha, it is. But, this exemption is supposed to apply to job functions such as human resources, compliance, and marketing.
Like the executive exemption, the administrative worker must be paid no less than $1,012.00 per week.
And no, it does not apply to secretaries – even if their job title is more properly called “administrative assistant”.
The professional exemption pertains to jobs which require either advanced knowledge to conduct, like lawyers and accountants, as well as to jobs requiring creative expression, like writers or graphic designers. In NYC, for this exemption to apply, the worker must make no less than $455.00 per week.
But, these exemptions all have their own tiny nuances and interpretations which even lawyers can get wrong. So, if you think that an employer, who has a financial incentive to interpret these exemptions as broadly as possible, gets it right all of the time, think again.
So, if you work in an office and there is no time clock, you may want to check with an attorney to see if you’re getting all of your money. If you receive a salary, you may want to check with an attorney to see if you’re properly exempt.
4) Delivery Person
There are a multitude of reasons why delivery people suffer wage theft. But there is one issue in particular that delivery people tend to deal with a lot: unreimbursed costs and expenses while performing their job. In NY, any costs a worker incurs during the job must be reimbursed by the employer, or else it will count as an “unauthorized deduction” from the worker’s wages.
Tolls, parking, traffic tickets, vehicle ownership/maintenance costs – a driver can rack up plenty of expenses driving around the City for their job. In order to comply with the law, each of these expenses is to be charged to the employer, not the employee, even if it was the employee’s fault for the expense. When an employee has to pay the expense, the employer must reimburse them for it.
This also happens a lot with vehicle ownership/maintenance costs. If a driver owns their own vehicle and uses it for work, the employer must pay the driver maintenance fees proportional to the amount of time the vehicle is used for the employer's benefit. If an employer requires a driver to buy a bicycle to deliver food, the bicycle (along with the helmet, locks, lights and other related expenses) must be paid for by the employer.
So, if you’re a delivery driver (or really any employee) who isn’t always reimbursed for expenses you pay out of your own pocket, you should check with an attorney who can advise you about what you can do to get back this money.
3) Construction Workers
Say you’re going to build a house. Typically, what happens is you would hire a general contractor. This general contractor will usually organize the build and hire subcontractors to complete specific pieces of the house at the appropriate time. It is the workers for these subcontractors who do the physical work.
This set up can lead to wage theft in two different ways.
First, subcontractors may try to misclassify their workers, claiming that their workers are not “employees” as the law defines them but are instead “independent contractors”.
While an “employee” generally needs to be paid a minimum wage and overtime, an “independent contractor” does not need to be paid either. Classifying your “employees” as “independent contractors” can save subcontractors big money when calculating labor costs – so subcontractors are motivated to do this where possible to keep bids low.
But there are strict requirements for a worker to be considered an “independent contractor”. Thanks to recent changes in the law, construction workers in NY will generally always be considered “employees”, but the practice of misclassifying them still does continue. So be on the lookout.
The second way construction work leads to wage theft is when subcontractors fail to pay their workers because the general contractor did pay not the subcontractor as agreed-upon.
This problem is not directly the subcontractor’s fault. Labor costs are included in bids that the subcontractor submits to the general contractor. When the general contractor hires the subcontractor but does not pay for the work, the subcontractor doesn't have the money to give workers.
However, workers still have a right to receive their pay on time, regardless of the contract dispute between general contractors and their subcontractors. The risk of this type of situation could have been mitigated by the subcontractor in any number of ways.
If you’re not getting wages on time, don’t be cowed by a subcontractor’s sob story. It’s part of the business, the subcontractor needs to learn how to adapt to meet all of its legal obligations or it needs to stop hiring people.
2) Domestic Workers
I have personally seen more lawsuits involving domestic workers (maids, housekeepers, nannies, etc.) than any other category of occupation.
A lot of the time, domestic workers are not paid anything even approaching minimum wage, are not paid overtime, are not given any paystubs, are not given any hiring notices, do not have their hours recorded, and a whole slew of other federal and state violations relating to their employment.
The main reason for this is that domestic workers are usually hired by people who have absolutely no idea about how wage and hour laws apply to them.
Based on my own personal experience, if you are a privately-hired domestic worker, and are not employed by a larger firm, chances are your rights have been violated. You should probably go see an attorney who can advise you concerning the specifics of how your rights may have been violated and what you can go do about it.
1) Restaurant Servers
Coming in at Number 1 are servers at a restaurant. And the reason for this is simple: tips.
While there are some exceptions, servers generally are paid by their restaurants at a minimum wage. But, because a server will generally receive much more in tips than they will in wages, restaurants may take what is called a “tip credit” against the server’s wages: restaurants pay an hourly rate less than the minimum wage so long as the tips a server receives make up the difference.
However, in New York, a restaurant that takes a tip credit with its servers has to meet two requirements: (1) the restaurant needs to give the server WRITTEN NOTICE that it intends to take the tip credit and inform the server how the tip credit works; and (2) the restaurant needs to comply with all laws regarding how the tip credit is to be taken.
If the restaurant does not do these two things, the restaurant loses the ability to take the tip credit.
This notice requirement is commonly disregarded. Generally, when they’re hired, servers typically already understand that they will be receiving tips. So many times, a restaurant will not give a written notice which complies with the law.
And from that moment on, EVERY DOLLAR the restaurant takes from the incoming server for a tip credit will be unlawful.
Further, even assuming that sufficient notice is given to the server, the restaurant still needs to comply with all of the laws relating to handling the server’s tips. Sometimes the restaurant takes too much in tips. Sometimes the restaurant requires a server to share tips with ineligible employees or members of management. Sometimes the restaurant handle takes inappropriate deductions from tips.
Whenever a restaurant mishandles a server's tips, once again, EVERY DOLLAR the restaurant took for the tip credit is unlawful.
If you have worked in any of these positions within the past six years, you may be a victim of wage theft and entitled to recover money. Please call (914) 222-5786 or email email@example.com to arrange a free consultation to speak with an experienced wage and hour attorney who can advise you of your rights and help you get you what you're owed.
And just because you may not have worked at these jobs in the past does not mean that you're immune. Press the button to read our previous article about the five most common ways wage theft occurs generally to see if you may also be a victim.
Don't be a victim.
You Deserve More.