Wage Theft Statistics 2026: Back Wages, Industries, Tip Theft, and Enforcement

Wage theft means not paying workers what they are legally owed: unpaid overtime, pay below the minimum wage, off-the-clock work, stolen tips, illegal deductions, or misclassifying employees as contractors. It is far larger than the share that ever gets recovered. The U.S. Department of Labor recovered $259 million in back wages for 176,957 workers in fiscal year 2025, its best year since 2019. Researchers estimate that minimum wage violations alone cost workers about $15 billion a year. And the federal agency that enforces wage laws had 611 investigators in May 2025, the fewest since at least 1973. This report compiles the latest enforcement data from the DOL's Wage and Hour Division, state labor agencies, and Economic Policy Institute research, with every figure dated so you know how current it is.

Key Findings at a Glance

• The DOL's Wage and Hour Division (WHD) recovered more than $259 million in back wages for 176,957 employees in FY2025, an average of $1,465 per worker (DOL WHD data; DOL news release, January 8, 2026).
• Fair Labor Standards Act (FLSA) back wages rose 23% in a year, from $149.96 million in FY2024 to $184.43 million in FY2025 (DOL WHD FLSA data).
• Overtime is the biggest category by far: $146.4 million, or 79% of FY2025 FLSA back wages, owed to 110,551 workers (DOL WHD).
• Health care ($53.3 million), construction ($43.4 million), and food services ($42.7 million) led all low-wage industries in back wages in FY2025 (DOL WHD industry data).
• Child labor penalties hit $37.2 million in FY2025, up from $15.2 million in FY2024 and $1.4 million in FY2015, with 5,272 minors found employed in violation (DOL WHD child labor data).
• EPI estimates employers take about $15 billion a year from workers through minimum wage violations alone, an average loss of $3,300 a year per affected year-round worker (estimate published 2017) (EPI).
• Across 2021 to 2023, more than $1.5 billion in stolen wages was recovered through the DOL, state agencies, and class actions combined, a small fraction of estimated losses (EPI, December 2024).
• WHD had 611 investigators in May 2025, down from a peak of 1,232 in 1978 (Northwestern University and Rutgers Workplace Justice Lab).

Back Wages Recovered by the Department of Labor

The Wage and Hour Division enforces the FLSA (minimum wage, overtime, tips, child labor) and several other federal wage laws. Its FY2025 total of $259 million across all laws was the highest since 2019 (DOL). FLSA recoveries specifically have swung between $150 million and $227 million over the past decade.

Source: DOL WHD, Fair Labor Standards Act data. Averages are our calculation.

What the back wages were for

In FY2025, unpaid overtime dwarfed every other FLSA violation type.

Source: DOL WHD. Workers can appear in more than one row.

The number of workers owed minimum wage back pay nearly doubled year over year, from 21,543 to 41,812. Overtime cases are common because they hinge on details that are easy to get wrong or easy to hide: misclassifying a worker as salaried exempt, paying "straight time" for hours over 40, not counting bonuses in the regular rate, or splitting a long week across two pay periods. If you are checking your own overtime, our overtime calculator shows what time and a half should come to.

Wage Theft by Industry

The DOL tracks a set of "low wage, high violation" industries. In FY2025, three industries accounted for 8,260 of the compliance actions in that group and more than $139 million in back wages.

Source: DOL WHD, FY2025. Averages are our calculation.

Food services had by far the most compliance actions (4,088), which fits a pattern of many small cases: tip pool violations, unpaid side work, and missed overtime across many restaurants. Temporary help had the highest average per worker at about $3,850, and construction followed at about $2,368.

How Big Is Wage Theft, Really?

Recovered wages measure enforcement, not the size of the problem. Most wage theft is never reported, investigated, or repaid. The most cited estimate comes from the Economic Policy Institute's 2017 study of minimum wage violations in the 10 most populous states:

• 17% of eligible low-wage workers in those states reported being paid less than the minimum wage.
• That works out to 2.4 million workers losing $8 billion a year in those 10 states alone.
• Extrapolated nationally, workers lose about $15 billion a year to minimum wage violations.
• Affected workers lost about $64 a week, or $3,300 a year if they worked year-round, receiving about $10,500 instead of the $13,800 they were owed.

Source: EPI, "Employers steal billions from workers' paychecks each year" (2017).

Two caveats. First, this estimate is now nearly a decade old and covers only one type of violation; it does not include unpaid overtime, off-the-clock work, or tip theft. Second, minimum wages have risen in many states since, so the dollar figure would likely differ today. We cite it because no comparable national study has replaced it, not because it is current.

Recovered wages, 2021 to 2023

EPI's December 2024 follow-up added up what was actually recovered:

Source: EPI, "More than $1.5 billion in stolen wages recovered for workers between 2021 and 2023".

Among states that reported data to EPI, the largest three-year recoveries were New York ($54.7 million), New Jersey ($23.0 million), Massachusetts ($17.6 million), Pennsylvania ($16.3 million), and Illinois ($9.4 million). Seven states (Alabama, Florida, Georgia, Indiana, Louisiana, Mississippi, and South Carolina) do not recover wages for workers through a state agency at all, so workers there rely on the DOL or private lawsuits. California's data was not available for the study.

EPI also points to a barrier that keeps most claims out of court entirely: 56.2% of private-sector nonunion workers are subject to mandatory arbitration agreements, and one estimate finds 98% of low-wage workers covered by forced arbitration never file a claim when wages are stolen (EPI, citing Colvin 2018 and Estlund 2018).

Enforcement Capacity Is at a Record Low

WHD had 611 investigators on staff as of May 2025, the lowest count in data going back to 1973 and about half its 1978 peak of 1,232, according to analysis from Northwestern University and the Rutgers Workplace Justice Lab (Northwestern). EPI notes that by 2022 the average investigator was responsible for almost three times as many workers as in 1973 (EPI).

Two policy changes also shape what workers recover:

• Liquidated damages. The FLSA allows workers to recover an equal additional amount as liquidated damages, effectively doubling back pay. In June 2025, WHD issued Field Assistance Bulletin 2025-3 saying it will no longer seek liquidated damages when resolving investigations before litigation, reversing a 2021 policy. The DOL can still seek them if it sues (Littler). Private lawsuits are unaffected.
• Civil money penalties. For repeated or willful minimum wage or overtime violations, the maximum federal civil penalty was $2,515 per violation after the January 2025 inflation adjustment (Federal Register, January 10, 2025).

State Enforcement Spotlight

States with active labor departments recover substantial sums on their own:

• New York: The state Department of Labor recovered more than $35 million in lost wages and collected $2.2 million in penalties from wage theft cases in 2025, from more than 5,000 employers, its highest annual amount since 2015. Since 2021 it has returned more than $130 million to nearly 125,000 workers (NY Governor's Office, April 2026).
• California: In its most recent published field enforcement report (fiscal year 2021-22), the Labor Commissioner's Bureau of Field Enforcement assessed $31.7 million in penalties and $37.3 million in wages across its inspections and public works cases. That year it cited 89 violations of the pay stub law, Labor Code section 226, with $4.0 million in penalties (California DLSE BOFE report, FY2021-22).
• Criminal penalties: EPI notes that California, Hawaii, New Jersey, New York, and Rhode Island can treat wage theft as a felony, while Minnesota and South Dakota treat it as a misdemeanor (EPI).

Pay Stub Violations

There is no federal requirement to give employees a pay stub. The DOL's own FLSA guidance says the law requires employers to keep accurate records of hours and pay, but not to provide pay stubs (DOL FLSA Advisor). Most states fill that gap with their own wage statement laws, and some attach real penalties.

California is the strictest example. Labor Code section 226 lists nine items every wage statement must show, including gross wages, total hours, all deductions, net wages, the pay period dates, and every hourly rate with the hours worked at each. An employee harmed by a knowing and intentional violation can recover the greater of actual damages or $50 for the first pay period and $100 per pay period after that, up to $4,000, plus attorney's fees (Cal. Labor Code § 226(e)). These claims are also commonly brought as representative actions under California's Private Attorneys General Act (PAGA).

We list each state's wage statement rules in our pay stub requirements by state guide.

Tip Theft

Federal law prohibits employers, managers, and supervisors from keeping any part of employees' tips, whether or not the employer takes a tip credit (DOL, Tips). Tip violations still produced $10.0 million in FLSA back wages for 13,469 workers in FY2025, up from 10,651 workers the year before (DOL WHD). The maximum federal civil penalty for tip violations was $1,409 per violation after the 2025 adjustment (Federal Register).

Tipped workers also face a quieter form of underpayment: when a tip credit is taken but tips do not bring hourly pay up to the minimum wage, the employer owes the difference. That only shows up if the pay stub separates the cash wage, the tip credit, and the tips received. For current tipped cash wages in every state, see our Minimum Wage by State 2026 report.

Child Labor Violations

Child labor enforcement has grown sharply. In FY2025, WHD found 5,272 minors employed in violation across 976 cases and assessed $37.2 million in civil money penalties, nearly 27 times the FY2015 total.

Source: DOL WHD, child labor data.

Misclassification: Employees Paid as Contractors

Calling an employee an independent contractor removes overtime, minimum wage protection, employer payroll taxes, and unemployment insurance in one step. Hard national numbers are scarce and old:

• A 2000 study commissioned by the DOL (the "Planmatics" study) found that 10% to 30% of audited employers in the states studied misclassified at least some workers. The figure is still widely cited but is more than 25 years old (summarized by NELP).
• A 2023 EPI analysis estimated that a typical construction worker misclassified as a contractor loses up to $16,729 a year in pay and benefits, and a typical home health aide up to $9,529 (EPI).

Misclassified workers also typically stop getting pay stubs, since contractors are paid on invoices or 1099 forms. If you are genuinely self-employed and want a record of your own pay, our 1099 contractor pay stub template is built for that.

What Workers Can Do

Wage claims are won with records. These steps make a claim far easier to prove:

1. Keep every pay stub. Save a PDF or photo each payday. Federal rules require employers to keep payroll records for three years, but you should not rely on their copy. Our guide to how to read a pay stub explains every line to check.
2. Track your own hours. Write down start, end, and break times daily, including off-the-clock tasks like opening, closing, and required training.
3. Check the math each period. Hours times rate should equal gross pay, and hours over 40 in a workweek should be paid at 1.5 times your regular rate unless you are exempt. Our overtime calculator and payroll statistics report cover how often errors happen.
4. Know the deadlines. Under the FLSA, you generally have two years to recover unpaid wages, or three years for willful violations (29 U.S.C. § 255). Many states allow longer.
5. File a complaint. You can contact the DOL's Wage and Hour Division at 1-866-487-9243 or file online, or go to your state labor department. Retaliating against a worker for filing a wage complaint is illegal under the FLSA.

If you found this data useful, please cite as: "Wage Theft Statistics 2026," makemypaystub.com, October 2026.

Methodology and Sources

Federal enforcement figures come from the DOL Wage and Hour Division's published data tables, by federal fiscal year (October 1 to September 30). FY2025 is the latest complete year as of this report. Averages per worker are our calculations. Estimates of total wage theft come from the Economic Policy Institute and are labeled with their publication year; we flag where they are dated. State figures come from state agencies' own publications.

• U.S. Department of Labor, Wage and Hour Division: enforcement data, FLSA back wages, low wage high violation industries, child labor, Tips, FLSA Advisor on pay stubs.
• Economic Policy Institute: Cooper and Kroeger 2017; Poydock and Zhang, December 2024; 2023 misclassification report.
• State sources: New York Governor's Office (NYSDOL 2025 recoveries); California DLSE Bureau of Field Enforcement report, FY2021-22; California Labor Code § 226.
• Investigator staffing: Northwestern University and Rutgers Workplace Justice Lab, May 2025.
• Penalties: Federal Register, 2025 civil penalty adjustments.

This report is for information only and is not legal advice.

Last updated: October 3, 2026.