Can You Sue for Wage Theft? DOL Complaint, Lawsuit, and Damages

You can sue for wage theft in federal or state court, and if you win the Fair Labor Standards Act entitles you to double your unpaid wages plus attorney’s fees. You generally have two years from each underpayment to act, or three years if your employer’s violation was willful. You can also file a free complaint with the U.S. Department of Labor instead of, or alongside, going to court.

What Qualifies as Wage Theft

Wage theft is any practice where your employer fails to pay what you legally earned. The most common forms are minimum wage violations and unpaid overtime. The federal minimum wage is $7.25 per hour, and many states and cities set higher rates.¹ Non-exempt employees who work more than 40 hours in a single workweek are owed one-and-a-half times their regular rate for every extra hour.²

Other widespread forms include:

Off-the-clock work, such as being required to set up equipment, answer emails, or clean up before or after your scheduled shift without pay.
Illegal paycheck deductions for uniforms, tools, or cash register shortages, particularly when the deductions push your effective pay below minimum wage.
Tip theft, where the employer keeps a share of tips or forces employees to share tips with managers.
Misclassifying you as an independent contractor when your working conditions match those of an employee, which strips you of minimum wage and overtime protections.
Misclassifying you as a salaried “exempt” employee to avoid paying overtime when your salary or duties don’t meet the legal test for exemption.³

How Long You Have to Sue

This is where most wage claims die quietly. Under federal law, you have two years from the date of each underpayment to file a claim or lawsuit, and three years if your employer’s violation was willful.⁴ After the deadline passes, your claim is gone no matter how strong your evidence is.

The clock runs separately for each paycheck. If your employer shorted you every week for four years, you can still recover the last two years of underpayments (or three years if the conduct was willful), but the older weeks are permanently lost. Some states give you longer under their own wage laws, but the safest approach is to treat two years as your hard limit and act well before it.

Your Two Paths: DOL Complaint or Lawsuit

You have two ways to pursue unpaid wages, and you don’t have to exhaust one before trying the other.

Filing a Complaint With the Department of Labor

The federal Wage and Hour Division investigates complaints at no cost. You can reach them at 1-866-487-9243 or through their online portal. If the investigation confirms the underpayment, the WHD will seek payment of back wages on your behalf.⁵ Most states run their own labor agencies with similar processes, and you can often file with both.

The tradeoff is money. The WHD generally recovers only the back wages themselves; it won’t pursue liquidated damages (the doubling of your award) unless the agency itself sues your employer. Investigation timelines also vary widely based on employer cooperation and case complexity.

Filing a Private Lawsuit

A lawsuit lets you recover back wages, liquidated damages, and attorney’s fees. You can file in either federal or state court.⁶ Most employment attorneys who handle FLSA cases work on contingency, so you pay nothing up front. Court filing fees vary by jurisdiction, typically from roughly $50 to several hundred dollars.

If your employer underpaid multiple coworkers, the FLSA allows a “collective action” where affected employees join a single lawsuit. Unlike a class action, each worker must individually opt in by filing written consent with the court.⁶ Collective actions carry more weight and often push faster settlements because the employer’s exposure grows with every worker who joins.

Evidence to Gather Before You File

A wage claim lives or dies on documentation. Pay stubs are the most important record because they show hours, pay rate, and deductions. Save every one. If your employer doesn’t provide itemized stubs, that itself may violate state law and strengthens your case.

Keep your own log of hours worked. A notebook, calendar, or phone app where you record clock-in and clock-out times each day gives you a powerful backup when the employer’s records are missing or doctored. Courts routinely accept personal logs when an employer can’t produce reliable timekeeping records.

Gather these documents as well:

Your employment contract or offer letter, which shows the pay rate and terms you agreed to.
The company handbook or policy documents, which establish the employer’s own rules on overtime, breaks, and pay schedules.
Emails, texts, or messages with supervisors about your hours or pay, especially anything acknowledging unpaid time.
Bank statements confirming the actual amounts deposited, which can expose discrepancies with what your pay stubs claim.

Before filing formally, consider sending your employer a written demand for the unpaid wages by certified mail. Certified mail gives you proof of delivery and creates a paper trail showing you tried to resolve the issue. Many employers settle at this stage rather than face a government investigation or lawsuit. If they ignore the demand, you have documented evidence that you gave them a chance to pay voluntarily.

What You Can Recover

The primary remedy is the unpaid wages themselves, calculated from the hours worked and the rate you should have been paid. The FLSA is designed to punish employers, though, so the total recovery is often significantly larger.

Liquidated damages double your award. The statute entitles you to an additional amount equal to your back wages, effectively turning a $5,000 underpayment into a $10,000 recovery.⁶ Employers can avoid liquidated damages only by proving they acted in good faith and had reasonable grounds to believe they were complying with the law, which is a tough standard when the evidence shows consistent underpayment. Some states allow higher multipliers, with a handful permitting triple damages.

Attorney’s fees and court costs are paid by your employer if you win. The court must award reasonable attorney’s fees to a prevailing employee, which removes one of the biggest barriers to suing.⁶

Separately, employers who repeatedly or willfully violate minimum wage or overtime rules face civil fines of up to $2,515 per violation paid to the government, and willful violations can lead to criminal prosecution.⁷⁶ Those penalties don’t go to you, but they matter because they raise the pressure to settle.

You’re Protected From Retaliation

Fear of being fired stops many workers from speaking up, but federal law makes retaliation illegal. The FLSA prohibits your employer from firing, demoting, cutting your hours, or otherwise punishing you for filing a wage complaint, participating in an investigation, or testifying in a proceeding.⁸ The protection applies whether you complained to the government or raised the issue internally with your boss, and it covers oral complaints as well as written ones.⁹

The protection extends beyond your current job. A former employer cannot retaliate by, for example, giving a blacklisting reference to a prospective employer. If retaliation does happen, you can file a separate claim seeking reinstatement, lost wages from the retaliation itself, and liquidated damages equal to those lost wages.⁹

Taxes on Your Recovery

A settlement check feels like a win until tax season arrives. The IRS treats back pay as wages in the year you receive them, not the year you should have been paid. Your employer must report the payment on a W-2 and withhold the usual payroll taxes.¹⁰ A large lump sum can push you into a higher tax bracket for the year.

Not every dollar is taxed the same way. The portion covering personal injury damages, interest, penalties, and attorney’s fees is not treated as wages for tax and reporting purposes.¹⁰ If your settlement lumps everything into one number without breaking those categories out, you lose the ability to separate them at tax time. Make sure the settlement agreement specifies what each portion covers before you sign.

1
Office of the Law Revision Counsel. 29 USC 206 – Minimum Wage
2
U.S. Department of Labor. Overtime Pay
3
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemptions
4
Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations
5
U.S. Department of Labor. How to File a Complaint
6
Office of the Law Revision Counsel. 29 USC 216 – Penalties
7
U.S. Department of Labor. Civil Money Penalty Inflation Adjustments
8
Office of the Law Revision Counsel. 29 USC 215 – Prohibited Acts
9
U.S. Department of Labor. Fact Sheet 77A – Prohibiting Retaliation Under the Fair Labor Standards Act
10
Internal Revenue Service. Publication 957 – Reporting Back Pay and Special Wage Payments to the Social Security Administration