Joel Dillard & Associates

Representing Working People

Wage theft from salaried employees

Today's post is written by Jay Kucia, a law fellow working for the firm this summer.

Fifty billion dollars.


According to reports, that is how much pay workers lose in the United States annually through wage theft. Wage theft is when an employer refuses to pay an employee wages the employee is owed. This can happen in a variety of ways, and the employee is often completely unaware of it. This is particularly true for salaried employees.

Wage theft from salaried employees is actually fairly common. However, federal wage and hour law is too confusing, so employers often get away with inventive forms of wage theft. Here’s the bottom line: Your salary itself may be illegal, and you may be entitled to overtime.

To avoid overtime, the employee must prove the work meets three tests: the salary basis test, the duties test, and the salary threshold test.

  1. First, the salary basis test requires the employer to pay the employee that guaranteed minimum regardless of quantity or quality of work.
  2. Second, the duties test limits this exemption to employees who perform certain kinds of work. Generally, the only exempt employees are certain professionals, or those who supervise, manage, and control the work of other employees.
  3. Finally, there is the salary level test. Under this test, an employee is not exempt unless that employee earns more than $455 per week or $23,600 per year.
But how can you know whether you meet these tests? If you are a salaried employee who suspects your employer might be stealing your wages, what can you look for?

First, under the salary basis test, if your employer does not pay you your salary consistently you are entitled to overtime pay. Employers often do this by docking salaried employees for time missed or product losses. If your employer says you earn a salary, be on the look out for violations like this. Your employer may be cleverly—or even unintentionally—stealing your wages.

Second, under the job duties test, you are entitled to overtime (no matter how you are paid) if your work is mainly physical or manual labor. For example, if you are called a manager and paid a salary but most of your work is cleaning up behind other workers, you are entitled to minimum wage and overtime pay.

Third, under the salary level test, you are entitled to overtime if you make less than the salary threshold of $455 per week or $23,600 per year. This is a simple math problem, and is usually obvious from the pay check.

If you think you might be experiencing wage theft, consider contacting an employment attorney.


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