How Common is Wage Theft in the USA?

Wage theft is an awful crime, one which robs workers of their hard-earned money. There are a variety of definitions for this crime, but at its core, wage theft is when a worker or employee is not given the money they are contractually owed in exchange for the services they offer to their employers. Wage theft can occur in many forms, including not paying the contractually obligated rate, failure to pay overtime or failure to pay minimum wage.

Wage theft is absolutely illegal, as defined by the federal Fair Labor Standards Act, Davis-Bacon Act, and dozens of different state laws.

Just How Common is it?

Unfortunately, wage theft in the USA is way, way too common, and often occurs to those who have the least resources to fight back. Even more unfortunate is that case numbers appear to have risen significantly over the past two decades.

According to an estimate from the Wage Authority Group, in 2017, wage theft by American companies cost American workers a shocking $50 billion annually.

Older estimates show just how much wage theft is believed to have increased. In 2001, it was estimated to cost American workers more than $19 billion annually. Astonishingly, according to one chart, this cost Americans more money than robbery, auto theft, burglary and larceny – combined.

Unfortunately, the overall estimates of just how much wage theft actually costs American workers pale in comparison to the overall fines levied against companies who have stolen from Americans. For example, according to a CNN article in 2017, American workers recovered an estimated $2 billion from companies who committed wage theft between 2015-2016.

Some states have been more aggressive than others in prosecuting wage theft. For example from 2015-2016, California recovered $117 million, while New York won got $84.6 million.

What are famous examples of companies losing lawsuits after being accused of wage theft in America?

Again, sadly, there is no shortage of cases of some of America’s largest companies being successfully sued over this issue.

A review of the available data reveals that, as of 2019, many of America’s most storied corporations have been successfully prosecuted for wage theft:

  • Walmart ($1.4 billion)
  • FedEx ($502 million)
  • Bank of America ($381 million)
  • Wells Fargo ($205 million)
  • JPMorgan Chase ($160 million)

As the authors of the study make clear, wage theft is not a problem which is confined to small businesses, retailers or fast food shops. The companies above are all some of the largest and most economically successful in the United States, yet they have been forced to pay hundreds of millions – if not billions – in settlements and fines for these crimes.

And indeed, these cases may only be the top of the iceberg. The Communication Workers of America (CWA) is in the process of seeking $100 million in back wages against General Dynamics, a company which operates numerous call centers for the federal government. This case – and the alleged violations – trace back to 2013.

Thankfully, as rampant as this issue appears to be, companies have been made to pay for their crimes. One study showed that over 1,200 actions against large American companies cost those corporations $8.8 billion. Another study, this one of penalties enacted by the U.S. Department of labor and the regulatory bodies of eight different states, turned up an additional 4,220 cases which cost American companies $9.2 billion in penalties.