WAGE THEFT IN NORTH CAROLINA: The Hidden Crime Wave Robbing Workers and Communities

By Sabine Schoenbach
Workers' Rights Project
March 2013


Wage theft occurs when an employer underpays or fails to pay wages to workers who have earned those wages. Wage theft can take any of a number of forms. For example,
employers may fail to pay minimum wage or overtime, take employees’ tips, make illegal paycheck deductions, misclassify employees as independent contractors, or simply not pay promised wages.

However wage theft manifests, the impacts are devastating for workers struggling to make ends meet. It also hurts their communities, as a decline in personal spending power means less demand for local businesses’ goods and services. Furthermore, wage theft gives unscrupulous employers an unfair competitive advantage over those employers who do right by their workers.

A growing body of research, including national surveys and industry-specific studies, provides evidence of a broad and growing wage theft crisis across the country. This research demonstrates that wage theft is not isolated to a few bad apples; rather, it is taking place across industries and regions.

This report, the second in a series of reports on wage theft in North Carolina, provides a current snapshot of the prevalence and effects of this crime in North Carolina based on
available state and federal enforcement data, a review of industry-specific survey data, and, as much as possible, the voices of North Carolina’s stakeholders – workers, organizers, service providers, employment lawyers, and administrative agency officials.

  • Available enforcement data from the Department of Labor (NC DOL) and the US Department of Labor (US DOL) show that employers who engaged in wage theft stole, at a minimum, $33 million from North Carolina’s workers over the last five years.
  • National survey data and industry-specific data on wage theft show that the available enforcement data likely vastly understates the true scope of wage theft in the state.
  • The rapid growth of the low-wage labor market in North Carolina is a reason to believe that wage theft is on the rise.
  • North Carolina stakeholders, including workers, community organizers, attorneys, and administrative agency officials, note significant barriers that prevent workers from recovering their wages.
  • Practical and effective solutions are available to North Carolina’s lawmakers and agency heads to make it easier for workers to make claims, to ensure that
    delinquent employers pay, and to strengthen existing enforcement.

Many of North Carolina’s workers are still struggling in the wake of the Great Recession. At a time when the jobs deficit in North Carolina pushes 600,000 and there are three
applicants for every open job, employed workers are clinging to the jobs they have so they can support their families and make ends meet. At the very least, these workers deserve to be paid for their hard work.

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