Calculator Methodology

Reviewed by Nola Stetson (NS), Editor-in-Chief — Wage Theft Practice. Updated May 2026.

This page documents every step of the wage theft damage estimate: how the calculator determines the unpaid wage shortfall for each violation type, how liquidated damages are applied, what state law multipliers represent, and where the estimate diverges from what a court or DOL investigation would calculate.

Step 1: Weekly Unpaid Wage Shortfall

The calculator multiplies weekly unpaid hours by the applicable rate for the violation type selected:

• Unpaid overtime: Regular hourly rate × 1.5. The FLSA requires time-and-a-half pay for all hours worked over 40 in a workweek for non-exempt employees. The full 1.5× overtime rate is used rather than just the 0.5× premium because FLSA recovery includes the full hourly amount for those hours, not only the premium portion that was withheld.
• Minimum wage violation: Difference between $7.25/hour (the federal minimum) and the actual rate paid, multiplied by weekly hours. This models the federal floor only. If your state or city minimum wage is higher than $7.25, the actual shortfall is larger than this calculator shows. State minimum wages are not individually modeled.
• Off-the-clock work: Regular hourly rate times unpaid hours. If off-the-clock work pushes total weekly hours above 40, those hours should be entered as an overtime violation, since they are owed at 1.5× under the FLSA.
• Tip theft: Stolen tips are estimated at the regular hourly rate as a floor. If you have records of actual tips taken, use the true tip amount rather than an hours proxy.
• Misclassification: Estimated at 1.5× the regular rate for missed overtime. Misclassification cases often involve additional damages — denied benefits, tax exposure, employer’s FICA share — not modeled here.

Weekly shortfall is multiplied by the number of weeks in your selected lookback period to produce total back wages.

Step 2: Liquidated Damages

Under FLSA §16(b), an employer who fails to pay required wages is liable for an additional equal amount as liquidated damages — unless the employer demonstrates both (a) good faith and (b) a reasonable belief their practices complied with the law. Both elements are required; good faith alone is not a defense. The liquidated damages defense is rarely successful. The calculator applies the full equal-amount liquidated damages by default.

State law multipliers reflect stronger statutory penalties:

• FLSA default (2× total): Back wages + equal liquidated damages = 2× unpaid wages. Applied when no state enhancement is selected.
• Double damages states (CA, NY, IL): California Labor Code §1194, New York Labor Law §198, and the Illinois Wage Payment and Collection Act all provide for 2× unpaid wages as a penalty, broadly consistent with the FLSA default. Selected when applicable state law is chosen.
• Triple damages states (MA): The Massachusetts Wage Act (MGL c.149 §150) mandates treble damages — 3× the unpaid wages — as a non-discretionary remedy. No good-faith defense is available under the Massachusetts Wage Act. This is one of the most plaintiff-favorable wage statutes in the country.

Known Limitations

• Attorney fees. FLSA §16(b) makes reasonable attorney fees and costs mandatory for successful plaintiffs. These are separately recoverable and not included in the calculator output.
• State minimum wages. The minimum wage calculation uses the federal floor of $7.25/hour. States with higher minimums produce larger shortfalls than shown.
• Pre-judgment interest. Some courts award interest on unpaid wages in addition to liquidated damages; not modeled.
• Fluctuating workweek (FWW). Employers using the FWW method calculate overtime differently. FWW cases require a distinct calculation not handled here.
• Non-FLSA violations. Final paycheck violations, unlawful PTO forfeiture, and prevailing wage violations may be governed by state law only and are not modeled.
• Complex regular rate calculations. The regular rate for overtime purposes includes non-discretionary bonuses and certain other payments beyond base wages. If your compensation structure is complex, your actual overtime rate may be higher than the hourly rate you entered.

Questions? Contact us.