Economic Policy Institute
Report • By Margaret Poydock, Celine McNicholas, Samantha Sanders, and Matthew Wich • November 10, 2026
“Our analysis shows that nearly $1 billion in stolen wages was recovered for workers in 2025 through the U.S. Department of Labor, state agencies, and class action lawsuits. Importantly, as stated above, this figure does not account for all wage theft in the United States. Our analysis focused only on wages recovered, not total wages stolen, which we expect to be much greater. Whether it be out of fear of retaliation or a lack of knowledge about their rights, many workers never file a claim to recover stolen wages.”
Key takeaways:
- Wage theft—which happens when employers fail to pay workers the full wages they are legally owed—is widespread across sectors and affects millions of workers every year.
- Enforcement efforts at the federal, state, and local levels, as well as class action settlements, recovered nearly $1 billion in stolen wages for workers in 2025.
- These recovered wages represent a small fraction of the total amount stolen every year; we estimate that employers rob low-wage workers of more than $50 billion annually.
- Policymakers can combat wage theft by strengthening the right to form unions, establishing greater wage payment transparency, bolstering enforcement capacities, and increasing penalties for perpetrators.
Affordability—or the lack thereof—has dominated the recent political debate in the U.S. Much of the affordability debate has focused narrowly on prices. But the true underlying driver of today’s affordability squeeze is suppressed pay—the result of decades of policy decisions that have weakened workers’ bargaining power. Weakened bargaining power not only suppresses workers’ wages but also makes workers more vulnerable to exploitation. Among the most pervasive forms is wage theft, which robs millions of workers of billions of dollars each year (Cooper and Kroeger 2017; Poydock and Zhang 2024). Wage theft occurs anytime an employer fails to pay a worker the amount they are legally owed for their labor. This can take many forms, including not paying overtime to eligible workers, not providing meal breaks as required by law, or paying workers less than the minimum wage. Existing laws enable workers to recoup these stolen wages through government enforcement, individual wage claims, and class action lawsuits.
Our survey of all states and review of federal data find that nearly $1 billion in stolen wages was recovered for workers in 2025. This figure significantly understates the scale of wage theft, as it only accounts for recovered wages. Further, the Trump administration has pursued policies that make it easier for employers to minimize their liability for wage and hour violations and harder for workers to recoup money they are owed. The report highlights wage theft recovery efforts by the U.S. Department of Labor (DOL), by state agencies, and via class action litigation. Finally, the report provides policy recommendations at both the federal and state levels to combat the pervasive practice of wage theft across the United States.
What is wage theft?
Wage theft is the failure to pay workers the full wages to which they are legally entitled. It can take many forms, including but not limited to:
- Minimum wage violations: Paying workers less than the legal minimum wage
- Overtime violations: Failing to pay nonexempt employees time and a half for hours worked in excess of 40 hours per week
- Off-the-clock violations: Requiring employees to work off the clock before or after their shifts
- Meal break violations: Denying workers their legal meal breaks
- Illegal deductions: Taking illegal deductions from wages for business expenses such as uniforms or use of equipment
- Tipped minimum wage violations: Confiscating tips from workers, or failing to pay tipped workers the difference between their tips and the legal minimum wage
- Employee misclassification violations: Misclassifying employees as independent contractors to pay a wage lower than the legal minimum or avoid paying overtime
The scale and cost of wage theft
Wage theft is a costly and widespread problem that affects millions of workers each year. Research by Cooper and Kroeger (2017) estimates that workers lose $15 billion annually in minimum wage violations alone. This does not account for other forms of wage theft, such as overtime pay violations, off-the-clock violations, or the denial of legal meal breaks. To put that into perspective, Cooper and Kroeger’s (2017) estimate of minimum wage violations alone exceeds the value of any form of property crime reported in Federal Bureau of Investigation data in the last year, including stolen value from all currency ($10.96 billion) and locally stolen motor vehicles ($8.22 billion).
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