Wage Theft: How Do Employers Push Pay Below Minimum Wage?

Disney recently paid $3.8 million in back wages to 16,339 of its Disney World employees. According to the employees, they were forced to buy and maintain costumes needed for their jobs. Purchasing and maintaining the costumes pushed their pay below the federal minimum wage of $7.25 per hour. The Department of Labor’s Wages and Hours Division investigated claims Disney’s policy pushed pay to less than minimum wage and agreed with the employees.

Under the Fair Labor Standards Act, employers are allowed to charge employees for the cost of uniforms, but only under certain conditions. The costs cannot push pay below the federal minimum wage. Unfortunately, employers may charge employees these fees anyways, assuming they are ignorant of the law. This is a common wage theft tactic used by employers to cut costs.

Hardee’s and other fast food businesses have also come under scrutiny for similar practices. In this case, the restaurants paid employees with prepaid debit cards. These cards incurred fees that pushed pay below the federal minimum wage. For example, the cards carried a $3 monthly maintenance fee or incurred $2 charges when used at ATMs outside of the allowed network. Hardee’s and other fast food establishments may have used the prepaid cards to cut costs associated with payroll checks.

How Else Do Employers Pay Less Than Minimum Wage?

Another common tactic used by employers is to misclassify employees as independent contractors. This allows employers to trick employees into paying for equipment that is necessary for the job. Employers also use misclassification to pay workers less than minimum wage.

Workers harmed by wage theft can file claims with the Texas Workforce Commission. An attorney can also help workers recover back pay and other costs from employers.

North Texas wage theft lawyer Dan A. Atkerson is dedicated to helping workers hold their employers accountable for labor law violations.