Many Workers Paid Less Than Minimum Wage

The New York Times reported on a new study by the US Labor Department showing that wage theft is widespread in California and New York.

According to the Department of Labor, between 3.5% and 6.5% of workers in those two states are paid less than the federal minimum wage, which is against the law. The number of workers affected is at least 300,000 in each state.

These figures suggest that more than two million workers across the United States may be underpaid.

The Fair Labor Standards Act

US labor and employment laws are based in part on the Fair Labor Standards Act (FLSA). The FLSA sets national standards for things like:

  • Minimum hourly wages
  • Maximum hours worked per week at a regular wage (without overtime)
  • Limitations on jobs and hours for children under 18
  • Recordkeeping by employers

The Minimum Wage

Working for PeanutsThe federal minimum wage is currently $7.25 per hour, but in his 2014 State of the Union address President Obama proposed raising it to $10.10 per hour. He then signed an Executive Order raising the federal minimum wage to $10.10 per hour for workers on new federal service contracts.

Workers who routinely get tips can be paid less by employers, and workers under age 20 can be paid only $4.25 per hour for their first 90 consecutive days of employment with an employer. Students, apprentices, and certain other workers may also be paid less.

In addition to the federal minimum wage laws, states and cities can also set their own higher minimum wages, and 19 states and the District of Columbia have minimum wages higher than the federal floor.

For example, the minimum wage in the District of Columbia is $9.50 and Seattle is raising its minimum wage to $15 per hour by 2018.

In addition to Seattle and DC, the cities with the highest minimum wages are:

  • San Francisco
  • San Jose
  • San Diego
  • Santa Fe

Which businesses violate minimum wage laws?

Violations of minimum wage laws are most commonly performed by the following types of employers:

  • Restaurants
  • Hotels
  • Educational institutions
  • Health services providers
  • Retailers
  • Wholesalers

The Department of Labor study found that younger workers were more likely to be paid less than the minimum wage. Men are slightly more likely to be underpaid than women are.

Hispanics suffer higher minimum wage violations than non-Hispanics. Immigrants, and especially undocumented workers, are at high risk of wage violations. In California, non-US citizens were found to be 1.6 times more likely to suffer a minimum wage violation. In New York, the rates were 3 times as high.

How do businesses violate minimum wage laws?

Businesses can violate minimum wage laws in a number of ways:

  • Paying less than the legal minimum wage per hour
  • Failing to record and pay for all hours worked
  • Failing to pay overtime
  • Requiring employees to work "off the clock"

What can I do if I've been underpaid?

If you believe that you've been paid less than minimum wage, or are otherwise a victim of wage theft, you may want to consider contacting an employment law attorney in your area.

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