Employers stole an estimated $52.5 billion in wages from low-wage workers across the U.S. in 2025, while government agencies and class action lawsuits recovered nearly $1 billion. The gap shows how much wage theft goes unrecovered, even as enforcement efforts return money to workers.
Wage theft occurs when employers fail to pay workers what they are legally owed. Common violations include paying below minimum wage, withholding overtime, requiring off-the-clock work, making illegal paycheck deductions, withholding tips, and misclassifying employees as independent contractors.
The Economic Policy Institute (EPI) estimates that low-wage workers lost $52.5 billion to wage theft in 2025. That figure covers multiple types of violations. Minimum wage violations alone accounted for an estimated $15 billion in annual losses in earlier research.
Federal and State Agencies Recovered More Than $500 Million
The U.S. Department of Labor recovered $259 million in back wages during fiscal year 2025 for nearly 177,000 workers. That amounted to an average of about $1,465 per worker. Overtime violations accounted for 79% of the recovered wages, followed by minimum wage violations at 15% and tip-related violations at 5%.
State labor departments and attorneys general in 39 states and Washington, D.C., recovered another $267 million in 2025. The EPI said the figures may not capture all state recoveries because some states did not track the requested data or did not provide it.
Class action lawsuits recovered an additional $434 million in 2025, according to data compiled by law firms Seyfarth Shaw and Duane Morris. One major settlement involved Disney, which agreed to pay more than $233 million to over 50,000 current and former Disneyland employees following a dispute over the city’s minimum wage requirements.
Workers Still Face Barriers to Recovering Unpaid Wages
The nearly $1 billion recovered represents only a small portion of the estimated wages stolen each year. Workers may avoid filing claims because they fear retaliation or do not know their rights.
Forced arbitration agreements can also limit access to class action lawsuits. The EPI cites research estimating that 56.2% of private-sector, nonunion workers are covered by such agreements. Individual arbitration awards are often substantially lower than class action recoveries.
Wage theft also affects local economies. Workers who receive less than they are owed have less money to spend, while lost income can increase reliance on public assistance.
Policy Changes Could Strengthen Wage Enforcement
The EPI recommends strengthening workers’ ability to form unions and bargain collectively, increasing funding and staffing for the Labor Department’s Wage and Hour Division, and requiring clearer information about pay and employment terms.
The report also calls for stronger penalties for employers who violate wage laws. It points to proposals such as the Wage Theft Prevention and Wage Recovery Act, which would require employers to provide pay disclosures and regular pay stubs, and increase penalties for violations.
States can also strengthen protections through written pay statements, predictable paydays, limits on unauthorized paycheck deductions, and requirements for timely final paychecks. Some states have increased penalties for wage theft, with Colorado and Connecticut allowing felony charges in certain cases.
