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Study: Wage theft is rampant in most populous states

Getting paid for a hard day's work may not always result in full satisfaction for workers. Reading through a W-2 can seem frustrating -- adding up the various deductions that are legally taken out from your bottom line. However, recent research conducted by the Economic Policy Institute shows that wage theft is a substantial problem in America.

After reviewing minimum wage pay violations in the 10 most-populous states in the country, the study's authors estimate that wage theft costs Americans more money than is stolen in acts of burglary, larceny, auto theft and robberies combined. And the research only touched one aspect of wage theft -- the failure to pay the relevant minimum wage.

Laws exist to give workers recourse for stolen wages

The Fair Labor Standards Act was first enacted in 1938 to set rules for record keeping, minimum wage and other issues related to workers and the money they earn. Unfortunately, many businesses look for ways to avoid the rules and regulations to improve their own bottom lines on the backs of workers.

A non-exhaustive list of some of the more common forms of wage theft includes:

  • Requiring workers to "work off the clock"
  • Minimum wage violations
  • Misclassifying workers to avoid paying them overtime
  • Simply refusing to pay overtime at all
  • Keeping tips for the business -- not paying the employees who earned the tips
  • Shaving hours
  • Taking illegal deductions from a paycheck
  • Denying workers proper break time

Where Does Illinois Rank In The Findings?

In all, the researchers found 2.4 million workers in the 10 states involved in the research were impacted by wage-theft. It is critical to note that the study only looked at minimum wage pay violations. Illinois came in third with roughly 22.1 percent of minimum wage workers receiving less than the minimum wage.

Because the study only looked at wage theft in 10 states, national statistics are not included in the report. However, the authors estimate that $15 billion is stolen from minimum wage workers each year. Imagine the total cost of wage theft if the study included overtime violations, misclassified worker issues involving higher income groups and other wage and hour violations that companies engage in each year.

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