What Counts As Wage Theft?

Wage Theft Takes Many Forms

Some examples of wage theft include:

• Failing to pay overtime for hours worked beyond 40 in a week.
• Forcing employees to work “off the clock.”
• Misclassifying employees as independent contractors to avoid overtime and benefits.
• Withholding tips or making unlawful deductions.

According to the Economic Policy Institute, workers lose billions each year to wage theft — often more than is stolen in property crimes. In Indiana, low-wage workers, hospitality employees, and construction laborers are especially vulnerable.

Employee Rights Under Indiana and Federal Law

• Overtime pay. Most employees are entitled to time-and-a-half wages for hours over 40 in a workweek.
• Minimum wage. Indiana follows the federal minimum wage of $7.25/hour, but violations still occur.
• Recordkeeping. Employers must maintain accurate records of hours worked and pay provided.

For Employees: What to Do if You Suspect Wage Theft

1. Document everything. Keep detailed records of hours worked, pay received, and communications with your employer.
2. Ask questions. Sometimes errors are clerical and can be corrected quickly.
3. Know your rights. Even if you are paid a salary, you may still be entitled to overtime depending on your job duties.
4. Seek legal advice. An employment lawyer can review your situation and help you recover unpaid wages.

For Employers: Avoiding Wage Theft Claims

Wage theft claims can lead to lawsuits, penalties, and reputational harm. Employers can protect themselves by:

• Classifying employees correctly.
• Using reliable timekeeping systems.
• Training managers on wage and hour laws.
• Consulting legal counsel when uncertain about overtime rules.

Real-World Example of Wage Theft

In recent years, Indiana courts have handled multiple cases where restaurant workers were denied proper overtime or where construction companies misclassified employees as “independent contractors.” These cases often end with significant financial penalties for employers.

Conclusion

Wage theft undermines trust, harms workers, and creates unfair competition for honest businesses. Whether you’re an employee who isn’t being paid correctly or an employer seeking to stay compliant, knowing the law is essential.

At Goodin Abernathy LLP, I help workers recover unpaid wages and advise employers on building fair and lawful pay practices. If you believe you’re owed wages or want to make sure your company is compliant, we’re here to help.