Wage theft

What is Wage Theft?

Wage theft occurs whenever a worker is robbed of legally owed wages because an employer breaks the law or a contract.

Common forms of wage theft include:

• Nonpayment of wages: An employer fails to pay workers for some or all hours of work performed, or fails to pay workers in a timely fashion.

• Underpayment of wages: An employer pays workers less than they were promised or less than they are legally owed under state or federal minimum wage or overtime statutes.

• Tipped job violations: An employer pays tipped employees less than the legally mandated minimum wage for tipped jobs, forces tips to be "shared" with managers, or steals workers' tips.

• Deduction violations: An employer diminishes workers' pay by making unauthorized or illegal deductions from paychecks.

• Misclassification of employees: An employer falsely labels an employee as an "independent contractor" in order to avoid obligations to pay minimum wage and overtime (along with a host of other employment laws, and unemployment insurance, workers' compensation, and income tax payments). The "independent contractor" exemption is not meant to apply to those providing services under the direction and control of others; one example of misclassification would be to call a cashier a "salaried manager" to avoid the overtime provisions of federal law.

 

What can I do if I’m experiencing wage theft?

 

Learn about your wage payment rights

The University of Iowa Labor Center has your guide to wage payment rights in Iowa in both English and español.

Get help with wage theft

The Center for Worker Justice of Eastern Iowa, based in Iowa City, provides free support and case management to workers experiencing wage theft. CWJ recovers thousands of dollars each year for workers who are wronged. See CWJ’s wage theft resources and contact information here.

Iowa Legal Aid provides free legal support. Depending on the details of your case, they can assist with letters to employers, filing claims, or connecting you with an attorney. See their page on wage payment rights here.

Construction work on public projects often comes with additional standards and regulations. Due to the structure of the industry, it can be difficult for construction workers to know what standards apply. The Indiana-Illinois-Iowa Foundation for Fair Contracting has construction-specific wage rights guidance here.

Read up on worker rights

Special payment rules apply for tipped workers. To read up on rules related to tipped worker payment, check out this article.

Learn about worker rights on the University of Iowa Labor Center website.

File a wage claim

Workers experiencing wage theft have several options for addressing it. If the employer is cooperative, the quickest way to recover wages is through communication and mediation. With the help of the Center for Worker Justice, you can document the wage payment violation(s) and send a letter to your employer to request back pay. Other collective actions may be useful in pressuring the employer to comply.

In the case that the employer refuses, you may want to file a wage claim with the U.S. Department of Labor or the Iowa Division of Labor. We recommend pursuing other avenues before taking this step, however, as the claim process can take several months or even years and has a low rate of success for recovering back pay.

 

Where can I learn more about the costs of wage theft?

 

Wage theft affects over 250,000 Iowa workers each year and collectively costs them $900 million.

Read our October 2022 report, A Heist in Plain Sight: Wage Theft in Iowa.

• Full report including two-page executive summary (19-page PDF)

• Executive summary

• News release (2-page PDF)

The Iowa Policy Project, one of the predecessor organizations that formed Common Good Iowa, produced two earlier major reports on wage theft:

Stolen Chances: Low-Wage Work and Wage Theft in Iowa (September 2015)

By Colin Gordon

• Full report (16-page PDF)

• Executive summary (2-page PDF)

• News release (2-page PDF)

Wage Theft in Iowa: An Invisible Epidemic (August 2012)

By Colin Gordon, Matthew Glasson, Jennifer Sherer, and Robin Clark-Bennett

• Full report (30-page PDF)

• Executive summary (2-page PDF)

• News release (2-page PDF)