Unpaid Wages
Unpaid wages occur when employers fail to pay employees what they are owed. This is often also referred to as withheld salary or wages. Unpaid wages may occur when your employer fails to pay overtime wages, your employer fails to meet minimum wage requirements, your employer intentionally miscategorized employees in a way so that they are paid less than they should be, administrative errors are made, you are not paid for all of your services, there are disputes regarding paid leave or benefits, business expenses are not properly reimbursed, etc. When you don’t receive all the wages you have earned the first step is to bring it to your employer’s attention, as hopefully it was only a mistake. However, if it turns out you’re a victim of wage theft, unlawful deductions, shorted hours, or more, you have rights. To learn more about your rights with respect to unpaid wages, read below:
Once you learn that you will not receive a paycheck on your usual payday, it is important to keep a record of your hours worked during the relevant pay period, and any additional expenses that you suffer due to receiving your paycheck late.
You may first want to ask your employer for an explanation, to determine whether the failure to receive a paycheck was due to a processing error or bank mistake, rather than because the employer does not intend to pay you for the hours that you worked. In this situation, the employer and/or bank may voluntarily agree to cover any additional charges you incurred as a result of this mistake. You can either communicate directly with your employer or contact your Human Resources department. This will also ensure that you are not at fault for failing to submit records for the hours that you worked.
Many states have laws that require employers to pay employees for all hours worked, and which require employers to pay employees at regular intervals, such as biweekly or semimonthly. These laws may impose penalties on employers who do not comply with the law, and may even provide for criminal prosecution. In states that have their own wage and hour laws (or if you are not covered by the federal law, you should contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
Federal laws that require you to be paid at least minimum wage for hours worked are enforced by the Wage-Hour Division of the U.S. Department of Labor. However, if you received at least the minimum wage for the hours that you worked, the federal agency will not be able to help you, even though you were not paid as agreed for the hours you worked. If your state does not have a specific law covering this situation, then you should consult with the Department of Labor and/or a local attorney to determine how to proceed. You may also wish to pursue an action against your employer in small claims court, depending on the amount owed you.
Once you learn that a paycheck is incorrect, it is important to keep a record of your hours worked during the relevant pay period, the pay stub you received, and a copy of the check if you are forced to cash it before a new paycheck is issued.
You may first want to ask your employer for an explanation, to determine whether the reduced amount of the check was due to a processing error or bank mistake, rather than because the employer does not intend to pay you for the full amount of hours you worked. In this situation, the employer and/or bank may voluntarily agree to cover any additional charges you incurred as a result of this mistake. This will also ensure that you are not at fault for failing to submit records for all hours that you worked.
Many states have laws that require employers to pay employees for all hours worked. These laws may impose penalties on employers who do not comply with the law, and may even provide for criminal prosecution. In states that have their own wage and hour laws (or if you are not covered by the federal law), you should contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
Federal laws, that require you to be paid at least minimum wage for hours worked are enforced by the Wage-Hour Division of the U.S. Department of Labor. However, if you received at least the minimum wage for the hours that you worked, the federal agency will not be able to help you, even though you were not paid as agreed for the hours you worked. If your state does not have a specific law covering this situation, then you should consult with the Department of Labor and/or a local attorney to determine how to proceed. You may also wish to pursue an action against your employer in small claims court, depending on the amount owed you.
Federal banking law requires that anyone who writes a check, including employers, must have enough funds in the bank to cover the check. Additionally, many states have laws requiring that an employer is able to cover paychecks for a certain length of time after they are issued. Once you learn that a paycheck has bounced, it is important to keep a record of your hours worked during the relevant pay period, the pay stub you received, and all documentation from your checking account that confirms that the payroll check was returned for insufficient funds and lists any additional expenses you incurred as a result.
You may first want to ask your employer for an explanation, to determine whether the returned check was due to an accounting error or bank mistake, rather than because the employer does not have the funds to cover employee payroll expenses. You can either communicate directly with your employer or contact your Human Resources department. In this situation, the employer and/or bank may voluntarily agree to cover any additional charges you incurred as a result of this mistake.
Many states have laws that require the employers to have sufficient funds to cover all payroll checks. These laws may impose penalties on employers who do not comply with the law, and may even provide for criminal prosecution. In states that have their own bounced paycheck law (or if you are not covered by the federal law), you should contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
Federal laws that require you to be paid at least minimum wage for hours worked are enforced by the Wage-Hour Division of the U.S. Department of Labor. If your state does not have a specific law covering bounced paychecks, then you should consult with the Department of Labor and/or a local attorney to determine how to proceed.
The federal minimum wage is $7.25 per hour. Some states have their own minimum wages rates. If the state minimum wage rate is higher, then the state law applies. For more information, see our site’s minimum wage page.
Minimum wage violations are a significant issue, especially among low-wage workers. Analysis of survey data in 2017 revealed that in the 10 most populous U.S. states, 2.4 million workers lose $8 billion annually to minimum wage violations. This means that year-round workers lose an average of $3,300 per year, which is nearly a quarter of their total earned wages. While minimum wage violations affect workers in all demographic categories, 17% of low-wage workers are the target of minimum wage violations.
The federal minimum wage is enforced by the Wage-Hour Division of the U.S. Department of Labor. In states that have their own minimum wage law (or if you are not covered by the federal law), you should contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
For more information on filing a minimum wage claim, please see our site’s filing a complaint page.
Eligible workers who work more than 40 hours in one week must be paid one and one-half times their regular pay for every hour worked in excess of forty hours under the overtime pay requirements of Fair Labor Standards Act (FLSA). Not receiving adequate compensation for extra work is an issue experienced by many workers, particularly by lower-income workers. A 2019 study found that 13% of workers were not paid for hours worked outside of their usual schedule. When this group was broken down by income, the highest percentage of respondents were in the $15,000 to $19,999 bracket. When broken down by gender, 16% of women were not paid for their overtime work, while 9% of men were not paid for their overtime work. For more information about whether you are eligible for overtime pay, please see our site’s overtime page. Some states also have overtime pay laws. If both state and federal overtime laws apply, the employee is entitled to whichever overtime protection is most strict and provides the most protection to you as an employee.
The overtime laws are enforced by the Wage-Hour Division of the U.S. Department of Labor. In states that have their own overtime law (or if you are not covered by the federal law), you should contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
For more information on filing overtime claim, please see our site’s filing a complaint page.
You may be surprised to learn that the answer may be no, depending on what you make. The only requirement under federal law is that if the employer chooses to have you bear the cost of the cash register shortage, the deduction cannot take your pay below the minimum wage and/or reduce your overtime compensation.
For example, if an employee who is subject to the statutory minimum wage of $7.25 an hour is paid an hourly wage of $7.25, the employer may not make any deduction from the employee’s wages for the cash register.
However, if you make more than the minimum wage, so that the deduction does not take your pay below the minimum wage, the employer is legally entitled to deduct the cost of the cash register shortage from your pay.
For example, if the employee were paid $7.60 an hour and worked 30 hours in the workweek, the maximum amount the employer could legally deduct from the employee’s wages would be $10.50 ($.35 X 30 hours). If the employee is paid an hourly wage of $9.25 per hour and worked 30 hours in the workweek, the maximum amount the employer could legally deduct from the employee’s wages would be $60.00 ($2.00 X 30 hours), so the full $15.00 deduction for the cash register shortage would be allowed under law.
Some states have laws that more narrowly limit the deductions which may be taken for cash-register shortages and other work-related items. For example, some state laws require employers to get written consent from the employee before taking deductions from the employee’s paycheck. Alternatively, some state laws only allow employers to take these deductions from an employee if that employee assumes responsibility for the loss. If you still have questions about your state’s laws relating to deductions, then you may wish to contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
The Fair Labor Standards Act does not require the payment of bonuses, so employees cannot enforce their right to receive a bonus by going to the federal agency that enforces the FLSA or going to court under the FLSA. However, that does not mean you are completely out of luck if you did not receive the bonus that you were promised, as you may have a contractual right to receive the bonuses that you earned.
First, you must be certain that you had a clear agreement with your employer about the bonus pay. If you did, you should draft a letter to your employer notifying him that you are not receiving your promised bonuses. If that does not resolve the case, you can seek the bonuses in small claims court if the amount is relatively low. Small claims court generally does not require an attorney and the filing fees are low. If the amount is large and your state small claims court will permit, you should seek an attorney.
The Fair Labor Standards Act does not require the payment of commissions, so employees cannot enforce their right to receive a commission by going to the federal agency that enforces the FLSA or going to court under the FLSA. However, that does not mean you are completely out of luck if you did not receive the commission that you were promised, as you may have a contractual right to receive the commissions that you earned.
First, you must be certain that you had a clear agreement with your employer about the commission pay-including the rate of the commission. If you did, you should draft a letter to your employer notifying him that you are not receiving your promised commissions. If that does not resolve the case, you can seek the commissions in small claims court if the amount is relatively low. Small claims court generally does not require an attorney and the filing fees are low. If the amount is large and your state small claims court will permit, you should seek an attorney. Some states have laws that award attorney’s fees to employees in pursuit of unpaid commissions.
When a business files for bankruptcy, its employees may have claims for unpaid salary, wages or commissions. Depending on the basis for the claim, all or some portion may be entitled to “priority” in the bankruptcy process. If your wage claim is entitled to priority, it might result in the claim being paid earlier than other claims or result in a greater prorated distribution than other creditors ultimately receive.
Priority exists for unpaid wages owed to employees in an amount up to $4,000 in unpaid wages earned within 90 days before the bankruptcy filing. Wages include salary, commissions, vacation pay, severance pay and sick leave. Unpaid wages in excess of $4,000 per employee or earned more than 90 days before the bankruptcy filing are not entitled to a priority; such claims will be treated as general, unsecured claims and paid with other creditor claims.
If you are continuing to perform work for a bankrupt employer, you may wish to verify that the bankruptcy court has approved wage payments in the amount of your prebankruptcy salary. The bankruptcy process may require employers to pay reduced wages, or may not allow for the payment of wages at all until there has been a final distribution of the company’s assets by the court.
If your employer has filed for bankruptcy, and you have either not been paid or are concerned about your ability to be paid for your work in the future, it is recommended that you consult with a local attorney with expertise in this area. Bankruptcy is a complicated subject with special legal requirements. To ensure that your right to assert a priority wage claim is not lost, it is important to get expert advice before any filing deadlines which might affect your ability to recover some of your back wages.
Wage theft is the illegal underpayment or non-payment of wages owed to workers. Evidence from surveys suggests that wage theft is common and costs workers billions of dollars a year. This transfer of money from low-income employees to business owners is unfair and worsens income inequality while harming workers and their families. Wage theft most often occurs with low-income workers and undocumented immigrant workers. A study found that 26% of low-wage workers were paid less than the minimum wage and found that 76% of workers who worked more than 40 hours were not paid the legally required overtime rate. From this study, it was estimated that workers lose an average of $2,634 annually due to these wage violations. In 2014, the director of the federal Labor Department’s Wage and Hour Division stated that his agency had uncovered nearly $1 billion in illegally unpaid wages since 2010. He also noted that the victimized workers had been disproportionately immigrants.
Though these circumstances are not the only way it can occur, wage theft often happens when employers refuse overtime pay, force employees to work off the clock, pay employees less than minimum wage, make illegal deductions from paychecks, misclassify employees, or fail to pay employees at all. Things to consider:
-Are you working over 40 hours a week and not getting overtime pay?
-Are you being misclassified as an independent contractor?
-Are you being paid less than $7.25/hour and not receiving tips?
-Have you not received payment for time worked?
-Are there deductions on your paycheck that seem irregular or that you do not recognize?
If you think that you may be owed wages, you can check the Department of Labor’s database of Workers Owed Wages and search by your employer’s name.
Wage theft can violate provisions of the Fair Labor Standards Act (FLSA), which requires a federal minimum wage and requires employers to provide for overtime pay for people working over 40 hours per week. When employers fail to meet these requirements, employees may be owed wages. Even when employers withhold amounts that seem small, the stolen wages can add up. For example, if a worker earns a wage of $290 for a 40-hour week, withholding a half hour a day from the paycheck translates into a loss of more than $1,400 a year (including overtime premiums). That could be almost 10 percent of a minimum-wage employee’s annual earnings.
The first step is to keep careful track of your pay and know what is being deducted from your paycheck. Know how many hours you have worked and make sure each hour is being accounted for on your paycheck. It is also helpful to know your rights regarding work and overtime pay. If you work over 40 hours a week, ensure that you are being paid proper overtime wages for the amount of time over 40 hours.
Unionizing is also a way to avoid wage theft. Union workers negotiate a contract to receive pay, and if wage theft is occurring then union advocates can challenge the wages being paid. Unions also provide an outlet for expressing concern or complaining about employer wages.
You can file a complaint with the U.S. Department of Labor’s Wage and Hour Division, and include information regarding your job title, pay, hours, and additional information from pay stubs and other payment information. You can also pursue your case at a state level, with state labor and employment division resources. You may also choose to pursue a private cause of action against your employer. In some states, employees are allowed to file wage theft claims in small claims court as long as the amount in question does not exceed the jurisdictional limit.
The FLSA is enforced by the Wage-Hour Division of the U.S. Department of Labor. Wage-Hour’s enforcement of FLSA is carried out by investigators stationed across the U.S., who conduct investigations and gather data on wages, hours, and other employment conditions or practices, in order to determine whether an employer has complied with the law. Where violations are found, they also may recommend changes in employment practices to bring an employer into compliance. The Department of Labor is authorized to supervise the payment of unpaid minimum wages and/or unpaid overtime compensation that is owed to any employee.
It is a violation to fire or in any other manner discriminate against an employee for filing a complaint or for participating in a legal proceeding under FLSA.
Willful violations may be prosecuted criminally and the violator fined up to $10,000. A second conviction may result in imprisonment. Employers who willfully or repeatedly violate the minimum wage requirements are subject to a civil money penalty of up to $1,000 for each such violation.
The FLSA makes it illegal to ship goods in interstate commerce which were produced in violation of the minimum wage, overtime pay, child labor, or special minimum wage provisions.
To contact the Wage-Hour Division for further information and/or to report a potential FLSA minimum wage violation, call:
Toll Free: (866) 4USWAGE (866-487-9243)
TTY: (877) 889-5627 (available Monday-Friday 8 a.m. to 5 p.m. Eastern Time)
You may also contact your local WHD office.
If you need further information about your state’s laws applying to unpaid wages and/or wish to report a potential state law violation, then you may wish to contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
There are several different methods under the FLSA for an employee to recover unpaid overtime wages; each method has different remedies.
- Wage-Hour may supervise payment of back wages.
- The Secretary of Labor may bring suit for back wages and an additional penalty, called “liquidated damages,” which can be equal to the back pay award (essentially doubling the damages) if an employer willfully violated the statute.
- An employee may file a private lawsuit for back pay and an equal amount as liquidated damages, plus attorney’s fees and court costs. An employee may not bring a lawsuit if he or she has been paid back wages under the supervision of Wage-Hour or if the Secretary of Labor has already filed suit to recover the wages.
- The Secretary of Labor may obtain an injunction to restrain any person from violating FLSA, including the unlawful withholding of proper overtime pay.
Your state law may have different methods for recovery of unpaid wages, and different remedies to be awarded to those who succeed in proving a violation. For further information, please contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
To file a complaint for unpaid wages under the FLSA, you may either go to the WHD, which may pursue a complaint on your behalf, or file your own lawsuit in court (which may require you to hire an attorney).
Generally, there is a 2 year statute of limitations for the recovery of back pay. In the case of willful violations, there is generally a 3 year statute of limitations. Do not delay in contacting the WHD or your state agency to file a claim. There are strict time limits in which charges of unpaid wages must be filed. To preserve your claim under federal law, you must file a lawsuit in court within 2 years of the violation for which you are claiming back wages, except in the case of an employer’s willful violation, in which case a 3-year statute applies. However, as you might have other legal claims with shorter deadlines, do not wait to file your claim until your time limit is close to expiring. You may wish to consult with an attorney prior to filing your claim, if possible. Yet if you are unable to find an attorney who will assist you, it is not necessary to have an attorney to file your claim with the state and federal administrative agencies.
Your state law may have different deadlines for recovery of unpaid wages. For further information, select your state from the map below or from this list.
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