How Serious Are Wage Theft Charges?

How Serious Are Wage Theft Charges?

Wage theft is a topic that can strike fear in the hearts of both employees and employers. For workers, it can mean being denied hard-earned pay. For employers, it can lead to costly legal battles, reputational damage, and even criminal liability. But how serious are wage theft charges, really? And what consequences do they carry, especially in California, where laws are particularly strict?

This blog dives deep into what constitutes wage theft, the legal consequences for employers, and how employees who suspect wage theft can seek justice. Whether you’re an employee unsure of your rights or an employer looking to stay compliant, this article will provide the answers you need.

What is Wage Theft?

Wage theft occurs when employers fail to pay their workers in accordance with laws and agreements. It can happen in various ways, including:

• Unpaid Overtime: Employees entitled to overtime pay under California law don’t receive extra compensation for working beyond the standard 40-hour workweek.
• Minimum Wage Violations: Paying employees less than the state or federal minimum wage.
• Misclassification of Workers: Classifying employees incorrectly as independent contractors to avoid paying benefits or overtime.
• Illegal Deductions: Unlawfully deducting wages for things like uniforms or equipment.
• Failure to Provide Final Paychecks: Delaying or withholding a worker’s final paycheck after they leave a job.

Wage theft doesn’t just hurt the employees but also creates inequality in the labor market, giving unscrupulous businesses an unfair advantage over law-abiding competitors. Given these implications, California takes wage theft violations very seriously.

Can You Go to Jail If Convicted of Wage Theft in California?

Yes, in California, wage theft can lead to criminal charges, which may include jail time. This stems from sweeping changes in state laws designed to crack down on employers who exploit workers.

California’s AB 1003 and Criminal Prosecution

California Assembly Bill 1003, enacted in 2022, dramatically raised the stakes for wage theft. Under this law, employers, including managers and executives, may face felony charges if they intentionally steal more than $950 from one employee or $2,350 collectively from two or more employees within a 12-month period.

The law classifies such actions as “grand theft,” making wage theft comparable in seriousness to crimes like burglary or fraud. Depending on the severity of the offense, those convicted may:

• Face up to one year in county jail if charged as a misdemeanor.
• Face up to three years in state prison if charged as a felony.

This is a significant departure from prior wage theft cases, which were typically handled as civil disputes rather than criminal acts. California lawmakers have taken this step to ensure accountability and deter abusive practices in the workplace.

Employers Beware

Even if jail time is not pursued, criminal charges can tarnish an employer’s reputation, resulting in strained client relationships and employee distrust. It’s a risk no employer should take lightly.

What is the Punishment for a Wage Theft Conviction?

The consequences of wage theft convictions in California aren’t limited to jail time. Employers found guilty can also face severe financial penalties and lasting reputational damage.

Civil Liability

Failure to pay wages owed can result in civil penalties, often involving the reimbursement of unpaid wages plus interest. Penalties may include:

• Up to $100 per day for each day wages go unpaid after an employee has left a job.
• Liquidated damages, which match the amount of unpaid wages.
• Attorneys’ fees and court costs.

Additional Criminal Penalties

Besides jail sentences, criminal convictions for wage theft may also include:

• Fines ranging from hundreds to thousands of dollars.
• The requirement to pay back stolen wages, often under court supervision.
• Mandatory probation, during which the business may be subject to audits.

Loss of Operating Licenses

California businesses convicted of wage theft may lose their licenses to operate, depending on the nature of the offense. Losing a business license can be catastrophic, especially for smaller companies relying on local goodwill.

Permanent Record Impacts

A felony wage theft conviction stays on a person’s criminal record, making it challenging for businesses to pursue contracts or for individuals to find future employment.

Can a Lawyer Help if I am Accused of Wage Theft?

Absolutely. Whether you’re an employee seeking restitution or an employer facing an accusation, consulting an experienced lawyer is crucial.

For Employees

If you suspect wage theft, contacting a lawyer can help you:

1. Understand Your Rights: Laws surrounding wage theft are complex. A lawyer can explain your rights and entitlements under California law.
2. File a Claim: An attorney can assist you in filing a wage theft claim with the California Labor Commissioner or pursuing a civil lawsuit for damages.
3. Maximize Your Compensation: Legal experts know how to calculate unpaid wages, overtime, penalties, and emotional distress damages to ensure you get the compensation you deserve.

For Employers

Being accused of wage theft can be overwhelming, but a lawyer can help you:

1. Build a Defense: An experienced attorney can review the facts of your case, ensuring any missteps are corrected and mitigating your legal exposure.
2. Negotiate Settlements: If the claim holds up, your attorney can help negotiate repayment terms to prevent escalation into criminal charges or lawsuits.
3. Ensure Compliance: Employers who want to prevent future accusations of wage theft can benefit from legal advice on setting up robust payroll documentation and policies.

Why Legal Guidance Matters

Navigating California wage theft laws without legal counsel is like trying to drive through a dense fog—confusing and potentially dangerous. Whether you’re defending your business or fighting for justice, professional expertise can be your greatest asset.

Why Wage Theft is Serious for All Parties

Wage theft charges carry real consequences that extend far beyond just the guilty party. For employees, it can mean not being able to pay the bills or missing out on money they’ve earned. For businesses, wage theft accusations can lead to bankruptcy, prison, or a permanently ruined reputation.

Understanding your rights and responsibilities is non-negotiable. Employees need to be vigilant about understanding their paychecks and documenting discrepancies, while employers must ensure their payroll practices are lawful and transparent.

If you’re currently navigating a wage theft issue, having a knowledgeable attorney by your side is essential. Mark Broughton has the expertise and dedication needed to guide you through this process and protect your interests.

Knowing how to move forward with confidence can make all the difference. Contact Mark today.