Should Embezzlement From Employees Also Be a Crime?

In the US (AFAIK it’s similar in other countries, but I’m primarily talking about US law) an employee using their position within a company to take money from the company to themselves is considered is considered a criminal action, which will commonly result in arrest and a criminal trial, with a possible jail/prison sentence upon conviction, and with conviction of such automatically disqualifying the person from many jobs. The common name for the crime is embezzlement, though the exact name will change based on local statutes and common law, and is a well-recognized crime that is commonly prosecuted.

But an employer using their position as employer to take money from employees to themselves by underreporting hours (either quietly or requiring ‘off the clock’ work), docking pay illegally, keeping money withheld from paychecks that should go to another purpose, or just deciding to pay less than they agreed to is not. It’s generally considered a civil action or a matter for a ‘labor board’ to handle before a civil trial. In the event that it happens to be illegal, it’s under a law that is very rarely enforced.

My contention is that all embezzlement should be treated in a similar manner, and that employers stealing from employees should be made criminal under similar principles to employees stealing from employers, and handled with at least the same severity. Employers who engage in wage theft should risk arrest, trial, imprisonment, and having a crime of violation of ficudiary duty on their record, the same as employees do. I don’t see how one can justify the current system, other than ‘the laws are written to protect people with power, and employers generally have more power than employees’.

But how do you send a company or corporation to jail? “Just following orders” is not an excuse for a manager any more than it is for a soldier, but ultimately, how do you punish an institution that encourages employee exploitation and abuse with anything other than fines and civil suits?

Wage theft IS a crime. Note the word “theft” in the term.

I sued a former employer for wage theft at one point, and the judge awarded me seven times my initial loss, which would have been a nice profit if the bitch had actually paid all of it, but as it was I got my original money owed back and some of the penalty. And interest is accrues forever, so if she ever turns up again she’ll still owe me, but with interest.

She stopped paying because she disappeared. Literally. No one can find her. Including the state and federal governments (there was also tax fraud involved). I suspect that some other people she owed money to who were less ethical than me might have… ah… done something nefarious.

Anyhow - by making it a civil violation rather than a criminal one I was able to pursue it myself in court and resolve the matter in less than a year, which probably would not happen in a criminal trial. For someone owed 1/3 of a year’s wages on the lower end of the pay scale getting the money might be the biggest priority.

But yes, I would agree that stealing money from employees should be a crime - which it is - and punished sternly - which it is not always the case at present.

I expect that any form of embezzlement has to prove the direct link between the funds and the beneficiary, and taking a few dollars from one employee isn’t going to be easy to detect, nor is it likely to be much benefit - and the employee always has recourse to civil suit to claim lost earnings. When it gets to larger amounts such as artist managers stealing from their charges, then I really think that it should be a crime and it should not be left to the artist who will probably not have the required level of legal powers to conduct searches and discovery of fraudulent acts.

That leaves quite a large area unmapped where witholding earning income and fraud/embezzlement and this would need to be defined.

IMHE the greatest fraud/embezzlement committed by employers is that relating to unpaid time - the balance is wildly in favour of the employer to coerce workers into undertaking extra work for no extra pay - the difficulty usually lies in contractual terms and it isn’t possible to legislate every employment contract. Again it is left to the employee to fend for themselves - the only employees who are likely to have some reasonable chance of success are those who are unionised. In the UK such legal actions are undertaken in employment tribunals - whose rulings do have force of law behind them, however in terms of setting out criminality, employment tribunals are largely toothless, and that is aside from the fact that this system is pretty much set against the employee - the unionised employee has a much better chance simply because peer advice from lower level representatives can ensure that simple but glaring errors are not made early on in the case.

The other big disadvantage of our employment tribunal system is that of costs - it can cost far more to lodge a claim than any potential sum being persued - our current administration distinctly tipped the balance wildly in favour of the employer base solely upon employer organisations and their lobbying - in fact this was part of their election campaign.

I do think that putting the unlawful deductions/underpayment of wages on to the criminal spectrum would be useful although I would not expect it to be used much - it would sharpen up the minds of employers and change attitudes.

Wage theft in comparison to other types of theft.

Add to this the pension game. “Hi, if you work for us for 20 years, you’ll get a nice pension.” Then they fire you at 19 years, eleven months, and sixteen days. You’ve been paid a little less, over all that time, in order to fund the pension…and now you get nothing in return.

I do not know if this is illegal…but it damn well should be.

Regarding the entry “Off-the-clock violations”: when I worked at McDonald’s in high school and college, they would make employees clock out when business was slow. We weren’t allowed to leave the employee lounge to run errands. I even got crap for doing homework. I was told by a friend whose mother worked for the state labor department that this practice was illegal, but the fines were too low to deter it.

Yank their charter. If the controlling officers of the company bear no responsibility for the corporation’s actions, then the whole thing is a criminal enterprise and should be treated accordingly.

Let me note- at no point did I advocate removing the civil remedies from the equation, and I think there should still be a civil tort - like there is a civil tort for an employee who embezzles money from an employer. It’s really common in the US system for there to be both a civil and criminal recourse to a harm, both of which can be pursued without removing the other - I can’t think of any case where there’s a crime with a clear victim that doesn’t include the ability to file a civil suit for damages. It’s often not pursued because lots of criminals (especially ‘street level’ criminals) just don’t have any assets to go after, but its there.

Some person takes the action of not paying the employee - a manager saying to work ‘off the clock’, someone in accounting changes the number of hours billed, or the like. That person can be held criminally liable, as can anyone who told them to do so. While legislating corporate culture can be difficult, making it so that whoever pulls the trigger on not paying employees risks prison/jail time by doing so. It’s possible to issue legal sanctions against a corporation, leading to it being dissolved or operating under permanent restrictions (like happened to IBM for antitrust violations), but that’s a different ball of wax than what I’m talking about here.

And again, criminalizing wage theft doesn’t mean abandoning civil suits. There is no reason not to leave the civil remedies in place (or improve them).

It is illegal - when ERISA was passed in 1974, it required that someone with 10 years of service had to be at least 50% vested. Changes were made in 1984 that required 100% vesting by 15 years and currently 100% vesting is required after 7 years. Now of course, that doesn’t mean that companies won’t try to illegally deprive people of their pensions - but I think this lawsuit probably was about one of the last occurences.

The problem is that what the OP describes is not larceny or embezzlement in any sense of those terms. A larceny would be when I take your property from you with the intent of depriving you of it permanently. Embezzlement is when you have given me your property, typically as an employee, with instructions that I do a certain thing with it, but I use it for my own purposes, with the intent to deprive you of it permanently. Think cash in the till. Yes, it was given to the employee voluntarily, but for a designated purpose, not to stuff in the employee’s pockets.

Illegally withholding wages or making you work off the clock and such things are not those terms because the employer never took that money from you nor were they given the money by you for a certain purpose. It was always the employer’s money to begin with. Yes, they have created a contractual obligation to pay you for services rendered, but that is the very definition of a civil contract violation and not any form of larceny or embezzlement. “Wage theft” is a shorthand but legally inaccurate term.

You are not embezzling if you fail to pay your credit card bill, right?

It would suck if every employer in the country was risking arrest if they made a mistake in payroll, whereas theft and embezzlement have easy definitions and can be avoided.

These aren’t mistakes being discussed rather deliberate theft from employees no matter how much you try to hide it.

It’s not theft if it was never the other person’s property to begin with! Again, have you committed theft if you don’t pay your credit card bill?

You’re saying it’s acceptable for employers to commit payroll fraud and working hour rules because it’s not property?

Cite where I said it was acceptable? The OP asks “Should embezzlement from employees also be a crime?” and then he describes a situation which is not embezzlement at all.

What he describes is a breach of contract which contains serious civil penalties, more than a typical breach of contract.

Ever heard of a colloquialism? This isn’t a courtroom, this is the real world. Everyone understands what is meant.

It’s not a colloquialism. Read the first two paragraphs of the OP. He describes classic employee embezzlement, and states it is a crime. So why, he says, do employers not get charged with a crime when they “embezzle” from their employees by failing to pay them a wage according to the terms of the employment contract?

He is comparing two vastly different things and attempting to equate them, adding commentary that the unequal treatment must be because rich employers write the laws. I am explaining why they are vastly different.

I spent quite some time as an employee, and did not appreciate it when employers abused their employees. However, the other day, I went to the back to start cleaning up, and one of my employees was standing by the washer. I asked her to unload the dryer, and she said, “sure.”

After a little bit, she said, “My ride is here.” and started to walk out the back door. I was a bit annoyed that she was just leaving but asked, “Don’t you need to clock out, first?” She told me that she had already clocked out.

Now, my immediate reaction was to have her clock out anyway, and remove her previous punch. That meant that I actually ended up paying her for about 20 minutes of standing around waiting for her ride, and about 4 minutes of folding towels.

Should I have been held criminally liable for my mistake? If I had not caught the error, if she had just walked out and I had not noticed the time discrepancy until pointed out by her or another party on her behalf, should I have to face any greater consequence than paying to make up that time?

OTOH, in my early days of fast food, I had a manager that would “allow” a cashier to make up till shortages themselves rather than be written up. Somehow, people were always short on his shifts. That fucker should be in jail. @UltraVires, would you consider that manager to be someone that is committing theft, or just a breech of contract?

Don’t get so hung up on the word ‘embezzlement.’ The question in the OP is: ‘should the act commonly called wage theft be criminalized?’ And the answer, of course, is yes.