Unlawful compensation retention occurs when an employer fails to remit earned wages to an employee. This can include regular salary, overtime pay, bonuses, commissions, and other forms of earned remuneration. For example, refusing to pay a final paycheck after an employee’s departure, or deducting unsubstantiated costs from an employee’s wages, could constitute unlawful withholding.
Ensuring timely and accurate payment of wages is a fundamental employment right. This protects individuals’ livelihoods and promotes economic stability. Historically, regulations surrounding wage payment have evolved to address power imbalances between employers and employees, preventing exploitation and ensuring fair labor practices. Proper wage disbursement is essential for a healthy employer-employee relationship and contributes to overall societal well-being.