A report published Friday by the progressive-leaning think tank the Economic Policy Institute found that federal, state, and local efforts were able to recover more than $1.5 billion in stolen wages between 2021 and 2023.
Wage theft, which includes things like paying workers less than the legal minimum wage or denying workers their legal meal breaks, "is pervasive across all industries and income levels," according to the report's authors, "but workers who can least afford to bear the cost of lost earnings—particularly low-wage workers—are disproportionately vulnerable to wage violations."
Wage theft is extremely costly to workers. Prior research cited by the EPI report estimates that workers lose $15 billion annually from minimum wage violations alone. For comparison, FBI data shows that robberies accounted for $598 million in losses in 2018, and $482 million the year after, so less than $2 billion over a two-year period, according to the report.
Action at multiple levels of government can help recover what's lost. At the federal level, the Department of Labor's Wage and Hour Division reports that it recovered $659.8 million between 2021 and 2023, which comes out to wage recovery for 510,534 workers, and an average of $1,292 in recovered wages per worker.
As an example of this kind of enforcement effort, the authors recounted that the Department of Labor (DOL) went after four Los Angeles sewing contractors, which yielded $1.1 million in back wages and damages for over 160 garment workers.
Meanwhile, at the state level, 34 departments of labor and attorneys general recovered a total of $203.3 million over those three years. The other 16 states either did not respond, did not have the requested data, or could not provide the requested data.
Class action settlements are another important avenue for wage recovery. According to the authors, the value of the top ten wage and hour class action settlements tallied $641.3 million in 2021—putting it on par with the DOL wage recovery for the full 2021-2023 period. The report, which includes class action settlement research done by the firm Seyfarth Shaw LLP, does not include class action data for 2022 and 2023.
"This class action data illustrates that workers are more effective in recovering stolen wages on a collective versus individual basis. However, many workers are barred from joining class action cases, because they are subject to forced arbitration agreements," the authors wrote.
When it comes to policy solutions, the authors noted that there have been a number of positive enforcement changes at the state level. For example, "many states have strengthened penalties for wage theft violations, enforcing them as criminal statutes" while some have "established laws allowing victims of wage theft to obtain a lien on employer property to ensure payment of back pay."
At the federal level, the authors advocated for increased funding for DOL’s Wage and Hour Division in order to boost enforcement efforts. The division has not seen a significant funding increase in over a decade, they wrote. The authors also argue in favor of a number of pieces of legislation, including the Wage Theft Prevention and Wage Recovery Act and the Protecting Right to Organize (PRO) Act—which would strengthen the right of private sector workers to unionize and collectively bargain.
While many in the labor movement expect U.S. President-elect Donald Trump to advance an anti-worker agenda, his pick to head the Department of Labor was met with cautious optimism by some corners of the labor world. Trump tapped Rep. Lori Chavez-DeRemer (R-Ore.) for the role. She co-sponsored the PRO Act in 2023—though at least one critic called this move "mostly symbolic."
In response to the news that Trump had picked Chavez-DeRemer, EPI's Celine McNicholas wrote in November that if workers truly have an ally in her, she "will advance policies that improve workers' lives."
According to McNicholas, those include funding the Department of Labor and protecting workers' overtime pay—as well as refusing to reinstitute the Payroll Audit Independent Determination program that was instituted during the first Trump administration, which mandated that if "if an employer proactively notified DOL of the failure to pay minimum wage or overtime or for taking illegal deductions from workers' paychecks, then DOL waived all penalties and liquidated damages," according to McNicholas.
The program "essentially permits employers who have stolen workers' wages to confess and get out of jail free," she wrote.
