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New study commissioned by DOL shows pervasive minimum wage violations

The U.S. Department of Labor (DOL) recently released the results of a new study that it commissioned on minimum wage law violations in New York and California. The DOL commissioned this study because it enforces the minimum wage requirements that are in the federal Fair Labor Standards Act (FLSA).

The group that conducted the study sought to measure three things: (1) the extent of minimum wage violations in New York and California; (2) the amount of lost income stemming from those minimum wage violations; and (3) the economic impact of those violations.

The study showed that employers violate minimum wage requirements far too frequently.  In California, the study estimated that between 344,000 and 372,000 minimum wage violations occur weekly.  This translates to between $22.5 and $28.7 million in wages that California employers wrongly withheld (or, in other words, stole) from their employees every week.  In New York, the wage theft from minimum wage violations was in the $10 to $20 million range every week.  Employers in the leisure and hospitality industry are the worst offenders in both states.

The economic impact of these violations is profound. The study showed that employers who steal wages from their employees, by not paying them all of the wages that they earned, pay hundreds of millions of dollars less than they should in taxes.  Because of the decrease in their income, employees who have their wages stolen utilize social services, such as food stamps and Medicaid, more than they should.  The study estimated that, in California and New York alone, between 14,800 and 66,400 families live below the federal poverty level because of employers paying less than the minimum wage.

“It’s difficult to extrapolate what these figures mean on a broader scale around the country.  But using conservative estimates, let’s say the national violation rate is half what it is in New York and California – that would mean 2 million workers a month are getting ripped off,” said Secretary of Labor Tom Perez.

If you work for an employer that is not paying workers all of the wages that they’re owed, you should contact an experienced employment lawyer, like the lawyers at the Maine Employee Rights Group, to learn more about your rights.