Wage Theft

In the full of developing world most of country enacted legislation for the protection of health, salaries, and welfare for employees but due to many loopholes presents in system employee face a lot of problems and wage theft is one of the serious problems of the. Wage theft means when an employer failed to pay earned wages of employees. wage theft is occurring through different ways like paying less than minimum wage which is prescribed by law, unauthorized and illegal deduction of wages, not paying for overtime, and unnecessarily burden on employees. Most of the low wages, daily wages, and migrant workers suffer from wage theft in India as we as a world. Wage theft is the most challenging issue before the administrative and judicial body to stop such unlawful practice.


Wage theft means the unlawful practice of employer when employees do not receive they legally and contractually promised a full amount of wages for work which they have performed. Or in other words, wage theft is types of unlawful and prohibited practice which is generally done by employers for cut wages of employees through different ways like withholding overtime pay, illegal dedication in daily wages and forcing employees to work more time which he/she bound to do and also, violate limitation prescribed by minimum wages act. Generally, wage theft practices in low wage workers, daily wage workers, and illegal immigrant workers. Wage theft is generally occurring at a large level when employers do not pay minimum wage to the employees according to the prescribed law for wages.

What are common types of wage theft

When employers do not pay proper wages as per prescribed law for employee then it amounts to wage theft and. There are various way to employer commit wage theft now describe as under below

  1. Paying less than prescribed minimum wage – When employers pay less than the prescribed amount of wage to workers then it is known as wage theft.
  2. Not paying for overtime – Generally, the majority of workers do not know their rights and when they work beyond prescribed time then it is counted under overtime. They are legally entailed to claim wages for overtime. Under section 14 of the minimum wages act 1948, stated that employees are fixed for particular prescribed time if employees are work exceed prescribed time then they are required to be paid extra wages as an overtime rate. Different types of act describe different types of periods for working hours but generally regular working hours in India is eight to nine hours per day and forty-eight to fifty hours per week. If any employees exceed the prescribed limitation period then he/she eligible to receive remuneration for that period. section 51 of the factory act 1948 stated that employees are not supposed to work more than prescribed 48 hours a week and section 59 factories act 1948 stated that employees are not supposed to work not more than 9 hours a day.
  3. The deduction period for meal breaks – Generally law prescribes time for working hours, meals break, and other stuff for employees but If the employer does not give time for a meal break to the employees then it would be considered as amounts to wage theft.
  4. Illegal deduction – Sometimes employers make illegal and unauthorized dedication from employee salaries. It would also amount to wage theft and violate the right of employee prescribes by law.
  5. Employee Misclassification – Generally, it is the obligation and duty of the company to protect its employee through provide health insurance and payment for gratuity but in case of independent contract employees they are not paying an adequate amount of wage and also not any type of protection provided by these employees. So, they also consider amounts to wage theft.

In which types of workplace or industry does wage theft occur

Generally, wage theft occurs in the non-union workplace. Union workers are more conscious about their salaries, health issues, and received wages according to the agreed contract. If the company does not provide salaries according to agreed contract then union workers raise voice against an illegal and unauthorized deduction of wages but in the case of non-union workers no one raise voice against wage deduction and exploitation. In the field of Agriculture, poultry processing, unorganized sector, janitorial services, restaurant work, and daily wage workers, garment manufacturing, long term care, home health care, and retail all these above are the industries with the highest number of cases reported for wage theft.

What are the remedies available for wage theft victim

If someone believes that he/she is a victim of wage theft then the law gives you the right to file suit against the employer to seek all unpaid wages. You can also claim against the employer to pay your legal fee, additionally, you can also claim for an additional loss like mentally, economic loss occurs due to nonpayment of wages.

Law relating to wages in India

Minimum wages act 1948 talks about that prescribe minimum rates of wages for certain employees. Generally, minimum wages are prescribed by the state via notification in state gazette under the minimum wage rule and regulation regarding a specific state.

Payment of wages acts 1936 talks about rule and regulation for payment of certain kind of employment. Basically, in this act more stressed about payment of wages on time to employees and also not illegally and prevent the unauthorized deduction of wages.

Payments of Bonus act 1965 talks about the payments of bonuses to certain establishments, employing 20 or more people based on profit, production, and productivity and. No person can take benefit for this act unless those who have not complete work 30 days. A person who can take benefit of a bonus minimum of 8.33% and a maximum of 20%.   

 The equal remuneration act 1976, this act talks about equal remuneration for both men and women and the purpose behind the equal remuneration act to protect discrimination based on sex.

The payment of gratuity act 1972, talks about payments of gratuity to employees working in railways, ports, factories and oilfields, plantations and mines, shops, or another establishment. The main purpose of enforcing this act to provide security to employees after retirement.

Wage theft during COVID-19

The whole world suffered huge economic loss and many national, multinational companies are facing a lot of problems regarding conduct their marketing and business profit due to coronavirus. Unemployment hit hard to thousands of employees at the national and international levels. Wage theft is one of the problems that are facing by employees at the national and international levels. Employers are refusing to pay promised wages to employees and they are paying less than the legally prescribed wage to employees due to this, these workers are forced to work under the less amount because they have not an alternative option for surviving. It is a worse time for daily wage workers and migrant workers.

After the announcement of lockdown, On 29 march Ministry of Home Affairs [1]was issue a guideline that employers to make payment of full wages to employees during lockdown without any deduction. But after some time Ficus Pay Private Ltd has filed a writ petition and challenged the order of MHA.

In the case of Ficus Pay Private Ltd & Ors v. Union of India[2], Supreme Court said that it is easy for some company to bear wages during lockdown but it is difficult to some other company who is unable to bear wages during the lockdown and SC held that government should not take coercive action against the employer, who fail to pay wages during the lockdown.

What step should take for stop wage theft

In these present developing countries more conscious about equality, health, infrastructure, and education. Even in the preamble of the Indian constitution talks about social, economic, and political justice. Wage theft is violating the constitutional provision and it is the type of serious problem which is face by most workers at the national and international levels. It is the obligation and duty of government to properly implement welfare schemes for workers and establish authority at every district, municipal and state level to take action against such employers who do unauthorized and illegal deduction of wages of employer and also central government should take a step against the stop wage theft.


In the end, I would like to say that the wage theft is unlawful to practise of employer when employees do not receive their legally and contractually promised full amount of wages for work which they have performed. Wage theft is the most challenging issue in this time before all judicial and administrative bodies because this lot of employees are facing a lot of problems not only national but also at the international level. The state must protect employees from wage theft and proper implementation of the law to prevent wage theft.


  1. www.scconline.in
  2. www.manuptrafast.com
  3. H.L. Kumar, Compliance under labor laws, (Universal law Publication, 2017, 5th edn)
  4. J.P. Sharma, simplified approach to labor laws, (Bharat law house, 2018, 5th edn)
  5. Gillian Morris and Simon Deakin, Labour Law, (Butterworths, 2012, 6th edn)

  • [1] Order No 40-3/2020-DM-I (A)
  • [2] Writ Petition (c) Dairy No. 10983 of 2020

Leave a Reply

Your email address will not be published. Required fields are marked *