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Four Reasons Why Wage Theft is the Silent Killer of Business

Businesses thrive on profit. While most companies will cut costs in more traditional ways, others engage in Wage Theft, the intentional or unintentional withholding of earnings from a worker. On first glance, one might think companies have no incentive to correct Wage Theft, but, in reality, companies have just as many, if not more, reasons to be afraid of Wage Theft. Wage Theft can occur at all levels of the labor supply chain, and Employers will be held accountable for Wage Theft that happens at any level of a multi-tiered industry. Companies need protection from the existential threat of Wage Theft.


  1. Wage Theft Comes With Huge Financial Risk  Fueled by frustration, workers (both employees and contractors) often sue their companies to try to get their stolen earnings back, leading to lengthy legal wars which often cost both parties much more than the disputed cost. companies suffer in particular since these battles can cost valuable company time and resources that could be better used elsewhere and cuts into increasingly thin profit margins. Even if companies are able to settle these issues out of court and pay back their workers fairly, their clients and partners may be reluctant to work with them again.

  2. Wage Theft Hurts Company Reputation Reputational damage can often be more devastating to a company than a financial incursion. While many big companies may be able to take a financial hit in order to settle a lawsuit, it is nearly impossible to shake off Wage Theft accusations. Wage Theft can paint a company as stingy, uncaring, careless, and/or abusive, damaging their reputation and making it more difficult to hire new workers. Additionally, partner companies will not want to threaten their own reputations by working with a controversial company.  Insurance Does Not Mitigate Risk

  3. Wage Theft is also an extreme strategic risk. Unlike other business risks, there is not much insurance that can protect companies from the consequences of Wage Theft. While some insurance can aid with defense costs, it is not sufficient enough to protect companies singlehandedly. The only way to waive the danger of Wage Theft is to eliminate the threat altogether. 

  4. Wage Theft Depletes The Tax Base Companies will sometimes engage in Wage Theft in order to avoid paying taxes. While this may give companies some short-term savings, it eventually erodes the overall tax base. When the government collects fewer taxes, they have less money to allocate towards public services like education, healthcare, and transportation. Over time, the destruction of these services will damage the economy and lead to smaller profits for companies.

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Verfico helps protect both workers and companies from Wage Theft. Verfico offers proactive wage assurance technology that prevents wage theft by reconciling worker hours logged via its app or site access devices with actual payroll data from subcontractors. This ensures accurate payment and provides actionable insights on labor costs, compliance, subcontractor risk levels, and workforce demographics, helping clients measure their community impact effectively.


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