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Photo of Michelle Cohen Levy
Photo of Michelle Cohen Levy

How to protect your business from wage theft accusations

On Behalf of | Oct 19, 2023 | Wage & Hour Laws |

As an employer, you understand the importance of having a good workforce. It’s just as essential to comply with regulations to save your company from lawsuits, penalties and fines.

One major issue impacting businesses in the United States is wage theft. However, having some policies and procedures in place can prevent it from happening to your employees.

What is wage theft?

Wage theft is used to describe situations where workers don’t receive the full wages they are entitled to, such as:

  • Being paid less than minimum wage
  • Not receiving overtime pay
  • Being misclassified as an independent contractor which means the employee doesn’t have wage protections and benefits

It impacts the workforce and hurts fair competition among businesses since companies that steal wages from their workers have an unfair advantage over companies that follow the law.

The Fair Labor Standards Act (FLSA) protects employees by setting a minimum wage, overtime pay, recordkeeping and child labor laws. There are ways for a company to ensure they comply with the FLSA, such as:

  • Regular self-audits to identify and fix any potential violations
  • Education and training of managers and employees
  • Having procedures in place for the correct classification of workers
  • Establishing clear workplace policies that prevent unfair practices, such as off-the-clock work and requiring employees to take regular breaks away from their work area. 

Following fair labor practices can foster a fair and positive working environment and improve employee morale and retention. It can also prevent accusations of wage theft and discrimination. Working with someone who understands the regulations can help ensure compliance.