What is Wage Theft, and How Does it Occur?

Workers of all types, in all industries, can fall victim to wage theft. Staffing businesses should consider some of the most common ways of how employers are unlawfully keeping employees from the wages they deserve. It is also smart to obtain staffing insurance, particularly crime coverage, for related liabilities. 


Blue-collar and white-collar workers are entitled to overtime pay for time worked after hitting 40 hours a week, unless classified as exempt from the Fair Labor Standards Act. staffing agencies should know who is exempt and who is not along with the breakdown by occupation. 

Minimum Wage Violations

Between federal, state and, in some cases, city minimum wage, one is entitled to the highest rate of pay. Wage theft can occur more easily if we do not stay up on minimum wage for your state. We must regulate that employers are adhering to the higher minimum wage (state vs. federal). 

Working Off the Clock

Work starts when an employee enters the workplace, including the time it takes to prepare for the tasks at hand, such as putting on protective gear, and ends when the employee leaves the place of work,  including the time it takes to clean up from the day. We can consider the following to learn if wage theft is occurring:

  • Employees are asked to work before and after set hours without additional pay
  • Employees are working through break time and lunch without additional pay

Illegal Deductions From Pay

Deductions from paychecks should never result in the employee getting paid less than minimum wage per hour worked.  Employees and staffing agencies can learn if wage theft is occurring by asking if employers take unauthorized or illegal deductions from employee pay. An example of this is if employees are being charged for required dorm living, electricity, etc.

Not Being Paid at All

If one provides work for an employer then one should be paid;  it is as simple as that. However, this does not always happen and is the most blatant form of wage theft. This can occur in different forms, such as employers not paying employees for all hours of work,  including travel time from site to site, employers simply not paying employees for days of work, or an employer not paying an employee’s last paycheck. This happens all too often. Secure staffing insurance so the agency is not held responsible for any discrepancies. 

About World Wide Specialty Programs

For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (800) 245-9653 to speak with one of our representatives.