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Banks Pay $1b Compensation to Employees Over Wage Theft

It seems that small businesses aren’t the only group banks tend to ignore. While it’s true that traditional banking services are more tailored for big business, small businesses are not the only ones suffering because of it.

 

According to a recent report, banks don’t go easy on their employees, either.

 

Good Jobs First, a resource center promoting corporate and government accountability in economic development, published a study focusing on the exploitation of employees of big corporations.

 

From 2000 onwards, employers had to pay up in 4,220 cases, resulting in a whopping $9.2 billion of penalties.

 

Grand Theft Paycheck: The Large Corporations Shortchanging Their Workers’ Wages collects data from two sources.

 

The first of these are US courts where employees have filed collective action lawsuits against their employers, with the second being the US Department of Labor and other regulatory agencies.

 

From 2000 onwards, employers had to pay up in 4,220 cases, resulting in a whopping $9.2 billion of penalties.

 

Guess what kind of institutions occupy five of the first twelve spots on the dubious list of “Dozen Most Penalized Parent Companies.”

 
 

Banks and Insurance Companies Pay Over $1 Billion Compensation to Employees

 

Although the top spots on the list go to Walmart ($1.4 billion) and FedEx ($502 million), Bank of America ($381 m) comes in third, with Wells Fargo ($205 m), JPMorgan Chase ($160 m), and State Farm Insurance ($140 m) close on their heels.

 

Allstate Insurance ($122 m) finishes eleventh, but big financial names like Citigroup ($110 m) and Morgan Stanley ($102 m) are also within the first twenty companies that paid out the most to unhappy employees.

 

Altogether, over 450 big businesses paid out over $1 million each.

 
 

Wage Theft

 

If you’re imagining bankers in ski masks stealing money out of employees’ pockets, you’re quite wrong. Wage theft is a way more cunning method for businesses to cheat employees out of their rightful earnings and thus earn more profit themselves.

 

Off-the-clock work is one of the most common types of wage theft. It means that an employer makes employees work before they clocked in for the day, or after they’re already clocked out. This basically means that the employee works for free.

 

Off-the-clock work is one of the most common types of wage theft

 

Meal or rest break violations often occur as well. Whenever the employee is forced to work over their (unpaid) lunch hour, their employer gets richer.

 

The third most common type of wage theft is overtime violation, when employees don’t receive compensation for their overtime. This is another way large employers like banks can save money at the expense of their employees.

 
 

Lessons for Small Businesses

 

There are a few things small business owners can learn from this report. First of all, don’t commit wage theft, because it will cost you more than the couple of bucks you can save on a forgotten coffee break. This is a bit obvious, but clearly people do it, so don’t.

 

But it’s even more important to remember to treat your employees right. An unhappy worker is a non-productive worker, and your small business will suffer a great deal if your employees don’t perform at their best.

 

Don’t commit wage theft, because it will cost you more than the couple of bucks you can save on a forgotten coffee break

 

And with the advance of the internet, no offence goes unnoticed. Platforms like Glassdoor allow employees to anonymously share their experience about their employer for all to see. That includes your customers.

 

To many customers, employees represent the human side of a business. People just like them, working for a company, trying to make ends meet. And since your customers may empathize with your employees, you better make sure that your employees don’t have a rightful cause to vent about online.

 

We at Veem recognize the importance of a motivated team of employees, just like we bow to the significance of small businesses to the global economy. Which is why we strive to do justice to both groups.


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