States Escalate Wage Theft Enforcement with Criminal Charges Against Employers

Littler reports that a growing number of states and localities across the US are changing how they enforce wage and hour laws by treating wage theft as a felony, not a civil violation.

Minnesota Attorney General Keith Ellison charged a dairy owner with four counts of wage theft and one count of felony racketeering for systematically depriving workers of wages and subjecting them to abuse (State of Minnesota vs. Keith Lawrence Schaefer).

Jurisdictions including California, New York, Connecticut, and Colorado now impose criminal sanctions, including fines and imprisonment, for willful wage violations.

The presumption that intentional nonpayment of wages, including unpaid overtime, minimum wage violations, and employee misclassification, constitutes a form of theft comes amid a broader effort to deter exploitative practices as vigorously as other forms of economic crime.

Prosecutors have brought felony charges in high-profile cases involving unpaid wages, fraudulent payroll practices, and worker coercion. Recent cases include criminal indictments of business owners in Washington and California, with charges ranging from grand theft and conspiracy to racketeering and tax evasion.

This trend is also driven by legislative reforms, public pressure from labor advocacy groups, and the deterrent power of criminal liability.

In a related move, the US Department of Labor announced in June 2025 its intention to compile and report all criminal regulatory offenses it enforces to the Office of Management and Budget.

The agency also outlined criteria for referring wage cases to the Department of Justice, including prior violations, worker harm, obstruction of investigations, and evidence of employer awareness of wrongdoing.

Companies should prioritize compliance through payroll audits, HR training, and documentation. Counsel should tell clients that wage violations are no longer merely financial liabilities. They now carry potential criminal consequences that demand active risk management.