Most associate the term “wage theft” with unpaid wages. This is certainly true, but it’s not the whole story. Denial of employee benefits is another form of wage theft, one that employers get away with all too often.
If your employer is denying you the ability to take paid leave or access to any benefits included in your contract, they are stealing. It might not be direct theft of your take-home pay, but you are being denied a portion of your contract-signed compensation for the work that you do. Your employer is breaking California labor laws and, worse, they probably know it. They might even be denying you legally-required benefits.
The California employment lawyers of Eldessouky Law are here to defend your right to fair wages and full benefits, just like it says in your employment contract.
Benefits as Pay: Know Your Compensatory Benefits
When you were hired, your employer made an offer that included not just pay, but also a stack of cool benefits that are part of your pay. These are known as “compensatory benefits.” Some are mandatory – the state of California requires your employer to provide them to all full-time employees. Others are incentives, used to make a job more appealing when there might be higher-paying positions.
Legally, your “Total Compensation” is the sum of your base pay and the value of benefits offered as part of your compensation.
If the benefits were included in your employment contract, they are part of your pay. Therefore, denying you any of these benefits – or the ability to use them – is a form of wage theft that employers often enact on purpose. It might be a strategy to reduce the cost of employment. Maybe your boss is just mean. No matter what the situation, you have a right to those benefit s- or their monetary value – as pay for the work that you do.
Types of Compensatory Benefits
One of the reasons employers get away with benefits-wage theft is because employees often don’t fully realize that benefits are legally part of their pay. Here are some of the most common types of compensatory benefits, many of which get conveniently overlooked when it comes time to cash in on those employment advantages.
- Insurance – health, vision, dental, and other types of insurance coverage
- Paid time off – both mandated and beyond the legal requirements
- Retirement contributions or matching
- Gym memberships
- Products and Employee discounts
- Tuition reimbursement
- Training and certification
- Commissions and bonuses
- Childcare compensation
- Health and wellness programs
- Employee finance or investment programs
- Employee assistance programs
- Stock options and vesting schedule
California Statutory / Required Benefits
Here are the benefits that your employer is required by California law or federal law to provide for you, whether or not they choose to include these benefits in your employment contract. Most of these benefits are also compensatory benefits, but your employer is universally at fault if you are not provided any benefits on the following list.
- Minimum health insurance
- FMLA Leave – unpaid time off for family and medical needs
- Paid sick leave – 3 work days / 24 hours off per year
- Worker’s compensation coverage
- Retirement IRA plans
- Remote work expense reimbursement
You also have the right to a whole stack of temporary leave types, from pregnancy to jury duty.
How Employers Commit Wage Theft Through Benefits Denial
Benefits often go under-used because people are busy, and almost no one uses the full scope of benefits included in their employment contract. Employers take advantage of this to minimize their total cost of employment, a practice that is only ethical if benefits are still available upon request. Not everyone will use their free gym membership, but someone will, and their full compensation relies on it’s availability. Not everyone remembers to contribute to their retirement fund for employer matching, but they had better still match your contributions if that’s what is in your employment contract.
Employers get away with benefits denial by hoping that all benefits offered as compensation will slip through the cracks. This becomes illegal when the effort grows into an intentional conspiracy to deny employees compensatory benefits rather than pay for the promised programs. As experienced employment lawyers, we can share a few of the more common methods employers use to deny benefits and commit benefits wage theft.
Benefits – Earned Vacation is a Wage
In California, earned vacation time is legally considered a form of wages, ensuring that
employees are entitled to the monetary value of their accrued vacation time upon
termination or resignation. Unlike some states where employers can enforce a “use it or
lose it” policy, California prohibits such practices. Instead, employers must allow
employees to carry over their accrued vacation time from year to year, ensuring that
their hard-earned benefits are protected. This distinction underscores California’s
commitment to fair labor practices and prioritizing the rights of employees to enjoy their
earned benefits without fear of forfeiture.
Denial of Time for Paid Leave + “Use It or Lose It”
One of the most prominent forms of benefits wage theft is denial of paid leave. This involves a two-step process. First, employers establish a “Use it or lose it” policy, meaning paid leave days do not roll over into the next year. This seems fine to employees, at first. Of course they will use their paid leave days whenever it is necessary or convenient. But then the second half comes into play.
Then, managers simply deny all requests for time off in which paid leave days would be used. It may be an accident in a busy year but, often, the effort is intentional. If you do not receive the cash value of your unused paid leave days at the end of the year, then wage theft has been committed against you.
Infinite Delaying Tactics
Because work is busy and people don’t have time to follow-up, infinite delaying tactics can be used to deny compensatory benefits. Employees inquire and request access to a benefit, and they’re told that they will hear back later. Later comes, and no effort has been made. Weeks, then months, and even years pass and the benefit is never made available, with all inqueries falling into limbo after a cursory promise to address it later.
Failure to Enroll Employees in Benefits Programs
Many benefits, such as healthcare and other insurance policies, require timely enrollment. Employees must be enrolled in the benefits programs so they can have a personal account and access the benefit services. If an employer fails to enroll an employee during the enrollment period, “Oh well, you’ll just have to wait until next year”. This is yet another form of “hands clean” wage theft through benefits denial.
Failure to Make Benefits Available
Employees may simply fail to provide an employee access to the benefits they have been promised. Training programs, for example, may never be scheduled, and financial consultations may never be booked on an employee’s behalf. All sorts of employee assistance and development programs are avoided when the employer refuses to take their part in connecting employees to the services they have promised to offfer.
Tied Up in Red Tape
The final method is to claim that benefits are tied up in an endless approval process. Some boss higher in the chain, someone in HR, or some program manager needs to approve the request before it can go through. Then they need to complete an application, wait on the approval process, and run it by someone else. Eventually, the red tape becomes too thick to get through and the benefits are effectively denied.
FMLA/CFRA
“In California, both the Family and Medical Leave Act (FMLA) and the California Family
Rights Act (CFRA) provide eligible employees with job-protected leave for specific
family and medical reasons. While FMLA still applies to companies with 50 or more
employees within a 75-mile radius, recent updates to CFRA have reduced the threshold
to just five or more employees. To be eligible for FMLA or CFRA benefits, an employee
must have worked at least 1,250 hours in the 12 months preceding the start of the
leave. Employees can review their company’s policies and consult with human
resources or legal professionals to assess eligibility based on this criterion and other
factors such as the duration of employment and the nature of the qualifying event, such
as the birth of a child or a serious health condition. Understanding these requirements
empowers employees to assert their rights and access the leave they’re entitled to
under state and federal law.”
Examples of Wage Theft by Benefits Denial
Stolen Vacation Days
An employee takes a lower-paying job that offers more paid vacation days. However, every time they submit a request for vacation days, their request is denied with one excuse or another. Once, their days were approved, only to be revoked a few weeks before their plans. At the end of the year, the vacation days disappear they never took their vacation, and they are not reimbursed for the paid days off that never happened.
Missing Health and Wellness
An employee with a health condition is excited to take a job that includes health and wellness benefits including a gym membership, a discount prescription program, and wellness consultations. However, their health deteriorates after starting the job when these benefits never manifest. They never get their gym card or prescription account, and requested consultations are never scheduled.
Unexpected Childcare Expenses
A working parent seeks employment with a company that offers childcare reimbursement so they can safely work full-time. They pay for childcare out of pocket and submit their reimbursement forms, but the childcare benefit is never added to their paycheck or offered as a separate payment. Their household suffers due to the unexpected additional cost of childcare while the parent works full time.
Delay Is Denial, and Denial is Wage-Theft
Don’t get fooled by these oh-so-clever tactics to make promised benefits unavailable. Employers like to downplay the importance of compensatory benefits and make employees feel demanding just for asking and pursuing the issue. Employees may be chastized for not focusing on their work or for bothering the higher-ups who must approve the benefit. Employees may be called impatient or pushy for trying to gain access to their benefits within the span of several months after making a request.
However, these are not privileges to be denied or delayed at your employer’s convenience. Compensatory bonuses are part of your compensation. They are an aspect of your pay, and you are paid every one to four weeks.
A good employer makes compensatory benefits available immediately or sets a clear access timeline as part of the employment contract. An employer committing wage theft offers benefits in employment contracts that they never plan to fulfill.
California Wage Theft and Denial of Benefits in a Nutshell:
In California, wage theft extends beyond unpaid wages to include the denial of
employee benefits, which is a prevalent issue in workplaces. Employers may unlawfully
withhold paid leave or other benefits outlined in employment contracts, violating
California labor laws and denying workers their rightful compensation. This practice
often goes unnoticed, as employees may not fully realize that benefits are part of their
pay. Employers employ various tactics, such as infinite delaying tactics or failure to
enroll employees in benefits programs, to evade providing compensatory benefits. If you
suspect your employer of denying your benefits, consult with employment lawyers to
defend your rights and seek appropriate compensation.
Have Your Compensatory Benefits Been Stolen?
You have a financial right to the benefits listed in your employment contract. They are part of your pay, and denial of these benefits is wage theft. If you or someone you know has been continually denied access to your rightful and compensatory benefits, the employment lawyers of Eldessouky Law can help.Our legal team is dedicated to defending the rights of California workers, whether your employer is failing to pay overtime or failing to provide the full value of your compensation package. Not only is this a form of wage theft, it can harm employees who were relying on access to benefits that are then denied to them. Contact us today to consult about your situation regarding stolen benefits and employer theft.
