Wage Theft

The short version

Wage theft happens when your employer doesn't pay you all the money you've earned. This can include not paying minimum wage, overtime, or stealing your tips. Federal law sets basic rules for pay, and knowing these rules can help you understand if you're being paid fairly.

The law this is built on

Every point below comes from the authority named next to it. Verify the current text before relying on it.

29 U.S.C. § 206(a)
This section states that every employer must pay each employee wages at a rate not less than the federal minimum hourly wage.
Why it matters: This sets the lowest amount an employer can legally pay you per hour, protecting you from extremely low wages.
29 U.S.C. § 207(a)(1)
This section requires employers to pay employees at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.
Why it matters: This ensures you get paid more for working extra hours, discouraging employers from overworking staff without proper compensation.
29 U.S.C. § 203(m)(2)(B)
This section specifies that an employer cannot keep any portion of an employee's tips, even if the employer pays the employee minimum wage.
Why it matters: This protects your tips from being taken by your employer or shared with non-tipped employees like managers or owners.
29 U.S.C. § 203(g)
This section defines 'employ' to include to 'suffer or permit to work.'
Why it matters: This means if your employer knows or should know you are working, even if not formally scheduled, they must pay you for that time.

Words you need to know

Minimum Wage: The lowest hourly pay rate an employer can legally pay you. The federal minimum wage is set by 29 U.S.C. § 206(a), but states can have higher minimum wages.
Overtime Pay: Extra pay you get for working more than 40 hours in a workweek. Federal law (29 U.S.C. § 207(a)(1)) requires this to be at least 1.5 times your regular hourly rate.
Tips: Money customers leave for service employees. Federal law (29 U.S.C. § 203(m)(2)(B)) prohibits employers from taking your tips.
Off-the-Clock Work: Work you perform for your employer that is not recorded and for which you are not paid. This is often illegal under 29 U.S.C. § 203(g) if the employer knew or should have known you were working.
Regular Rate of Pay: The total compensation for employment, divided by the total hours worked in any workweek. This is used to calculate your overtime rate (29 U.S.C. § 207(e)).
Workweek: A fixed and regularly recurring period of 168 hours (7 consecutive 24-hour periods). This is how your hours are counted for minimum wage and overtime under 29 U.S.C. §§ 206-207.

Your rights

✓You have a right to be paid at least the federal minimum wage (29 U.S.C. § 206(a)) or your state's minimum wage, whichever is higher.
✓You have a right to be paid 1.5 times your regular rate for hours worked over 40 in a workweek (29 U.S.C. § 207(a)(1)).
✓You have a right to keep all tips you earn; your employer cannot take them (29 U.S.C. § 203(m)(2)(B)).
✓You have a right to be paid for all hours you work, even if they were not formally scheduled or approved, as long as your employer knew or should have known about the work (29 U.S.C. § 203(g)).
✓You have a right to ask for a record of your hours worked and pay received.

How the process actually works

1
Identify a potential wage violation
When you suspect a problem with your pay.
You notice your paycheck is short, you're not getting overtime, or your tips are being taken. This is often based on the rules in 29 U.S.C. §§ 206-207.
2
Gather evidence
As soon as you notice a problem, and ongoing.
Collect pay stubs, time sheets, work schedules, emails, texts, or any other records showing your hours worked and pay received. This helps prove your case.
3
Talk to your employer
After gathering initial evidence, if you choose to address it internally.
If you feel comfortable, discuss the issue directly with your employer or HR department. Sometimes, it's an honest mistake. Refer to the legal requirements in 29 U.S.C. §§ 206-207.
4
File a complaint with a government agency
After internal efforts fail, or if you prefer to go directly to an agency.
If talking to your employer doesn't work or you don't feel safe, you can file a complaint with the U.S. Department of Labor (DOL) Wage and Hour Division or your state's labor department.
5
Consider a lawsuit
If agency actions are not satisfactory or if you choose to pursue private legal action.
You may be able to sue your employer directly in court to recover unpaid wages, overtime, and damages. This is often done with the help of a lawyer.

Deadlines that can end your case

Federal Statute of Limitations (FLSA)
2 years from the date of the wage violation, or 3 years if the violation was willful.
If you miss this deadline, you may lose your right to recover unpaid wages under federal law. A 'willful' violation means the employer knew or showed reckless disregard for whether its conduct was prohibited by the FLSA (e.g., 29 U.S.C. § 206-207).
State Statute of Limitations
Varies by state, but can be longer or shorter than the federal period.
You should check your state's specific laws, as they might give you more time to file a claim. Missing this deadline means you cannot recover wages under state law.

Costly mistakes

✕Not keeping track of your hours worked, especially 'off-the-clock' work.
✕Ignoring small pay discrepancies, which can add up over time.
✕Not saving pay stubs, work schedules, or communications with your employer.
✕Waiting too long to act, potentially missing legal deadlines.
✕Believing that your employer's policies (like 'no overtime') can override federal law (29 U.S.C. § 207(a)(1)).
✕Being afraid to speak up due to fear of retaliation, which is also illegal.

Your checklist

Review your pay stubs regularly to ensure they match your hours worked.
Keep your own detailed records of all hours you work, including start, end, and break times.
Save all documents related to your employment, such as offer letters, schedules, and pay stubs.
Learn your state's minimum wage and overtime laws, as they may be higher than federal law.
If you suspect wage theft, gather evidence before confronting your employer.
Contact the Department of Labor or your state's labor agency for guidance if you can't resolve the issue directly.

Common questions

What is the federal minimum wage?

The federal minimum wage is $7.25 per hour, as set by 29 U.S.C. § 206(a). However, many states and cities have their own minimum wage laws that are higher. Your employer must pay you the highest applicable minimum wage.

Does every job qualify for overtime pay?

No. While 29 U.S.C. § 207(a)(1) broadly requires overtime for hours over 40, some employees are 'exempt' from overtime rules. These often include executive, administrative, professional, and certain outside sales employees who meet specific salary and duty tests.

Can my employer make me work off the clock?

No, if your employer knows or has reason to believe you are working, they must pay you for that time, even if you weren't scheduled or formally approved to work. This is based on the FLSA's definition of 'employ' under 29 U.S.C. § 203(g).

Can my employer take a portion of my tips?

No. Under 29 U.S.C. § 203(m)(2)(B), employers cannot keep any portion of an employee's tips for any purpose. This includes managers and owners. Tips belong to the employees.

What if my state has different wage laws than federal law?

If state law provides greater protection or a higher wage than federal law (29 U.S.C. §§ 206-207), the law that benefits the employee more generally applies. For example, if your state minimum wage is higher than the federal minimum, your employer must pay the state minimum.

How this changes by state

Wage theft laws can vary significantly by state. While the federal Fair Labor Standards Act (FLSA), specifically 29 U.S.C. §§ 206-207, sets a baseline for minimum wage, overtime, and tip protection, many states have laws that offer greater protections. This includes higher minimum wages, different overtime rules for certain professions, or longer statutes of limitations for filing claims. Some states also have stronger protections against tip theft or specific rules for when employers can take deductions from pay. To find your state's specific rules, you should visit your state's Department of Labor website or contact a local labor agency.

When you need a lawyer

You should consider contacting a lawyer if your employer refuses to pay you after you've raised the issue, if the amount of unpaid wages is substantial, or if you fear retaliation. A lawyer can help you understand complex state and federal laws (like 29 U.S.C. §§ 206-207), gather evidence, negotiate with your employer, or represent you in court or before a government agency. If you've been fired or disciplined after complaining about wage theft, a lawyer can also help you understand your rights regarding retaliation.

Do this today

→Review your most recent pay stubs and compare them to your hours worked.
→Visit the U.S. Department of Labor's Wage and Hour Division website for federal information.
→Search online for your state's Department of Labor to learn about local wage laws.

This lesson is legal information for educational purposes only, based on 29 U.S.C. §§ 206–207 (FLSA). It is not legal advice and does not create an attorney-client relationship.