Wage Theft Is Driven By Numerous Factors – Hurting Employees In Many Ways

by | Sep 20, 2011 | News, Wage and Overtime Law

Wage Theft Is Driven By Numerous Factors – Hurting Employees In Many Ways

Wage theft occurs when an employer fails to pay minimum wage or overtime wages – and it happens all the time in Miami. The obvious result of wage theft is that the employee does not get the wages earned for working.

But, there effects of wage theft go beyond just reducing the money an employee receives. For this reason, the Department of Labor’s Wage and Hour Division is considering the additional effects of wage theft and signing agreements with nearly a dozen states and sharing information with the IRS to combat the other effects of wage theft. This effort is targeted at employers who misclassify employees as independent contractors, which “lets companies avoid paying workers compensation, unemployment insurance and federal taxes.”

So, not only are these (misclassified) employees not getting paid properly, but they also are not getting the protections afforded by workers’ compensation, unemployment insurance, nor are they getting their employer to pay its share of the taxes and withholdings on their wages. While yes, taxes and withholdings would be taken out to reduce the money pocketed by employees on each paycheck, the goal would be for the employer to pay its share of the amounts deducted – ultimately reducing the amount paid to the government by the employee by having the employer pay its share.

So, besides recovering twice an employee’s unpaid wages, bring a claim for unpaid overtime wages or minimum wage can help an employee reduce his/her tax responsibilities, get workers’ compensation coverage as well as unemployment benefits later on. In addition, if there is a workers’ compensation claim, recovering unpaid wages could help boost the value of such a claim.


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