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What Are Unpaid Wages?

Employees should keep track of overtime hours to ensure they receive proper payment.
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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 09 September 2014
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Unpaid wages are wages which have been earned through work, but not paid out to the employee. Employers may be required by law to pay employees on a set schedule and to provide pay for all hours worked. Employees who do not receive pay when they expect it or who are shorted on their pay may be able to sue for unpaid wages. There are a number of options available to people who believe that their employers owe them money.

While people may hope that they will never need to make a claim for unpaid wages, it is advisable to think ahead and to keep very good records so that any disputes can be quickly resolved. Employees should make note of the hours they work, including overtime hours, and they should keep written authorizations for overtime so that there can be no disputes later about overtime pay. In addition, employees should keep their paystubs so that they can be compared against their records and also against tax documents received at the end of the year. Any discrepancies should be discussed immediately with the employer.

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A classic example of unpaid wages can come in the form of shorted hours. An employee may receive a paycheck which is smaller than it should be because the employer failed to pay for all the hours worked or did not provide overtime pay. In other cases, employees may not receive paychecks at all. Bankruptcy is also a situation in which unpaid wages can become an issue, with the business failing to provide compensation for its employees because of its financial situation.

Sometimes unpaid wages are a mistake. It is generally recommended that employees bring errors in their paychecks, including paychecks returned for insufficient funds, to the attention of the employer before taking legal action. An honest mistake may have occurred and it can be quickly remedied. For example, an employer may have forgotten to transfer funds into the payroll account at the bank on payday, causing the paychecks to be returned to people who attempted to deposit them. In this case, the employer would be liable for any fees incurred when the employee attempted to deposit the check.

If an employer does not respond to a request to address unpaid wages, the situation can be reported to government representatives who work for agencies which protect workers, such as the Department of Labor in the United States. These representatives may be able to help employees recover their wages. Finally, a lawyer can be consulted to take the case into court. It can be expensive to sue for unpaid wages and this is something which should be considered before taking legal action.

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