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Wage Theft: Recognizing and Addressing Unlawful Pay Practices

By Douglas Lipsky

Wage theft is a pervasive problem affecting workers in various industries in New York. These unlawful practices occur when employers deprive employees of their rightful wages. This can involve unpaid overtime, minimum wage violations, and illegal deductions. 

Despite federal and state laws protecting workers against wage theft, you need an experienced New York City wage-and-hour attorney to protect your rights. This article looks at wage theft and unlawful pay practices and what you can do about them. 

How To Spot Wage Theft

Wage theft encompasses a range of unlawful practices by employers that deny employees their deserved compensation, by:

  • Not paying for all hours worked – This can include asking employees to work “off the clock” or editing timecards to reduce paid hours.
  • Paying less than minimum wage – Federal and state laws set minimum pay rates that employers must follow.
  • Misclassifying workers as independent contractors – Mislabeling employees as contractors to prevent paying them minimum wage, overtime, and other protections.
  • Denying overtime pay – Most workers are entitled to 1.5 times their regular rate of pay for overtime hours (over 40 in a week). Avoiding these payouts is wage theft.
  • Illegal deductions from paychecks – Deductions beyond taxes and those authorized by the employee are typically prohibited.
  • Requiring off-the-clock work – Mandatory off-the-clock work before/after shifts or during unpaid breaks is unlawful.
  • Tipped workers – Taking tips or not making up the difference if tips fall short of the minimum wage.

If your employer has taken part in such illegal tactics, you may have a valid wage and hour claim. 

How Federal and New York Laws Protect Workers Against Wage Theft

Federal, state, and city laws prohibit wage theft and enable workers to recover unpaid compensation. Key protections include: 

  • Fair Labor Standards Act (FLSA) – The FLSA establishes federal standards for minimum wage, overtime pay, record-keeping, and child labor. It requires employers to pay non-exempt employees at least the federal minimum wage and overtime pay at a rate of one and a half times their regular rate of pay for hours worked beyond 40 in a workweek.
  • New York Labor Law – New York wage rules govern pay frequency and minimum wages, overtime, prevailing wages, and deductions, and impose fines for violations. The NYLL provides greater protections than the FLSA, For example, the New York minimum wage is higher than the federal minimum wage, and the state law extends overtime pay to certain categories of workers not covered by federal law.
  • Wage Theft Prevention Act (WTPA) – Under the WTPA, employers in New York City must provide written notice of wage rates, pay frequency, and other employment terms to their employees. This helps promote transparency and prevents wage theft.

Although New York workers can file wage claims with the Labor Department to recover unpaid wages, an experienced employment lawyer knowledgeable in the applicable wage and hour laws can help explore all your options. 

How a Wage and Hour Attorney Can Help

Engaging a wage-and-hour attorney is crucial for workers who have experienced wage theft. An experienced attorney can:

  • Review pay records to identify violations and calculate unpaid wages
  • Send demand letters asking employers to pay owed wages or face legal action
  • Determine the strongest legal claims and strategies tailored to the case
  • Navigate complex wage and hour laws and procedures
  • File claims and lawsuits to recover wages plus damages, fees, and penalties
  • Negotiate settlements to avoid drawn-out litigation
  • Protect you against retaliation for reporting wage theft

One effective tool in combatting wage theft is a class-action lawsuit in which the claims of numerous workers who have suffered similar harm are combined into a single legal action. Class actions can give employees leverage and encourage employers to settle the claims.  

The Takeaway

Wage theft is a serious issue that affects many workers. By working with an experienced wage and hour attorney, employees can seek justice, hold employers accountable, and recover the wages they are rightfully owed.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.