Can Workers Sue for Theft of Wages in Wisconsin?

How to pursue a suit against an employer when banding together is difficult

By Benjy Schirm, J.D. | Last updated on June 29, 2022

It could start as an honest mistake—a manager forgetting to approve overtime hours, or HR clicking the wrong box on entrance paperwork, denying health care. Maybe something more nefarious is going on, with employers doing everything they can to cut corners and squeeze money out of the budget. Whatever the cause or reason, workers deserve more.

“We see lots of small violations,” says Caitlin Madden, a wage and hour attorney at Hawks Quindel in Madison. “Misclassifications happen all the time where workers are wrongly classified as exempt from overtime pay. We also see a lot of travel time complaints where employees are traveling between two places of employment and not being compensated for that travel time.”

That adds up quickly for the worker and its certainly time they are spending on behalf of the employer. These claims are often a small amount of money, but workers still aren’t getting paid for it. Most of these violations don’t just happen to one employee, but many.

Traditionally, the best chance workers had to be compensated was joining together in a class action lawsuit. Because of this, many employers have started adding forced arbitration clauses into their employment contracts. These clauses prevent workers from joining together as a class, and effectively stops all attempts to use litigation to solve controversies.

“Looking at an agreement between an employer and an employee in the same way that you would a bilateral agreement between businesses misses the power imbalance that you have when it’s a worker and their employer,” Madden says. “When you first start a new job and you have a pile of paperwork in front of you, most people aren’t thinking, ‘What will happen if my employer breaks the law and I have to bring suit against them?’”

Unfortunately for workers, the U.S. Supreme Court held that this practice is constitutional by federal law. Madden explains that the court’s decision effectively means these disputes must be resolved in arbitration rather than litigation. If an employee suffers federal minimum wage violations or discrimination, they are precluded from pursuing these wage claims in court or joining with other employees regarding the workweek or unpaid overtime. “It’s always a shock and it’s difficult for people to be worried about until it affects them and, by then, it’s too late,” Madden says.

It doesn’t mean there isn’t recourse, however. Workers can enter the arbitration process, where a panel of lawyers, judges and other experts evaluate their claim and pass judgement just as a court would. “Going through the arbitration process can be daunting for a worker. If you’re able to join with a group of people, it makes it a little bit easier for workers to be successful,” Madden says. “We often tell people that, ‘Yes, they have a good claim, but they will have to pursue it through this unfamiliar process, which is private, and has many other disadvantages to employee rights.’”

Madden is hopeful that the wage laws will change to better push back against the contract agreements and allow workers to assert their rights. “We are trying to look forward toward what the next steps are and how we can continue to represent clients that have these small wage theft or minimum wage issues because we think it’s a significant issue,” says Madden.

Anyone in these circumstances should certainly consult with a reputable and experienced attorney for legal advice for medical leave, back wages or overtime wages and to see what avenues are available to them. For more information about this area, see our overviews on employment law for employees and wage and hour laws.

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