Unraveling Wage Theft: How it Works and How to Protect Your Rights

WHAT IS WAGE THEFT?

Wage theft is when an employer unlawfully withholds an employees’ pay, either by not timely paying them or not paying them what they are owed. 

TYPES OF WAGE CLAIMS

When an employer commits wage theft then the employee may have a claim against the employer. Here are some common types of wage claims.

Failure to timely pay

One of the most common employment claims is when an employer refuses to pay an employee as required by Colorado law. Colorado Revised Statutes § 8-4-103 requires employers to pay employees at least once a month or every 30 days, whichever is longer, on regularly scheduled pay days. The employee is entitled to ALL earned wages and benefits from that pay period. An employer is not allowed to give the employee only part of their earned wages for the pay period and say they will pay the the rest later. Claiming not to have enough money to pay the employee is not an excuse to violate the law. 

Failure to pay overtime

Another common claim is when an employer refuses to pay an employee overtime. An hourly employee in Colorado is entitled to 1.5 times their regular hourly rate for work performed by an employee exceeding 40 hours per work week, 12 hours per workday, or 12 consecutive hours of work (regardless of the time started and ended). Some employers may try to pay an employee overtime pay at their normal pay rate, instead of 1.5 times that pay rate. An employer may also try to go in after an employee’s time sheet and change the amount of hours the employee worked, or when the hours were worked, so it does not appear that the employee hit overtime. This is unlawful!

Misclassifying employees as exempt from overtime

Both the federal Fair Labor Standards Act (FLSA) and state law exempt certain positions from overtime pay. The most common FLSA exemptions are for Executive, Administrative, and Professional employees, as those terms are defined under the FLSA. But employees may falsely try to claim an hourly employee fits under one of these exemptions to avoid paying overtime. Simply claiming that the employee is exempt is not enough to comply with the FLSA. Instead, the FLSA looks at things such as the employee’s salary and job duties to determine whether they are actually exempt or if the employer is simply trying to avoid paying overtime.

Misclassifying an hourly employee as exempt can give rise to significant damages. For example, an employer may require an exempt employee to work more than 40 hours a week, without additional pay. Some exempt employees may work up to 60 hours a week or more. If that employee is actually a misclassified hourly employee then the employer is unlawfully withholding 20 hours a week of pay at 1.5 times the employee’s normal rate. The employee in this example may be able to get that money back, with additional damages. Because the FLSA may allow an employee to recover these stolen wages going back 2-3 years, depending on the case, damages can add up to a lot.  

Unpaid breaks or working off the clock

Colorado law requires employers to provide hourly employees with paid 10-minute rest breaks for every 4 hours and an unpaid 30-minute meal break for every shift over 5 hours. The break must be uninterrupted, and the employee should be relieved of all duties during this time. Employees must be paid for on-duty meal breaks if it is impractical for the employee to not be on duty during the break. Employers must also pay employees for any missed 10-minute rest breaks, which time also counts towards overtime.

Many employers may ignore this and not give employees their required break time but also not pay the employee for the missed break. Over a 40 hour week this can add up to an additional 100 minutes of compensation that the employee is not being paid. Another common issue is an employer may require an employee to complete work either before or after their shift when they are off the clock. An employee should be paid for any time they are doing work duties, regardless of when or where those duties take place. Even if an employer requires an employee to take an online training class on their day off the employee should still be compensated for time spent taking the class. Additionally, if an employer requires the employee to arrive for work 30 minutes before their shift to set up then the employee is entitled to be paid for those 30 minutes. 

REMEDIES FOR A WAGE VIOLATION

Employees who do not receive their owed wages can file a complaint with the Colorado Department of Labor and Standards: https://cdle.colorado.gov/dlss-home-page/wage-and-hour-laws. The Department only has jurisdiction to award unpaid wages of up to $7,5000 so if the amount of unpaid wages is more than $7,500, then the employee may want to find an employment attorney to pursue a civil action in state court against the employer. Employers cannot discriminate or retaliate against an employee for filing a wage complaint. Employees may be able to recover wages from up to 2 years of when the wages became due and payable, or up to 3 years if the employer willfully violated the law.

Additionally, unpaid wages is an area where employees can join together and bring a class action lawsuit if they are all similarly situated. For example, if the employer regularly misclassified all of its hourly employees as exempt from the FLSA, they may be able to bring one lawsuit to recover unpaid overtime wages for all the misclassified employees. 

If you and your coworkers are not being paid correctly, or are being misclassified as exempt under the FLSA, contact us so we can recover your lost wages.