Wage‑and‑hour violations are happening less often, but they are costing companies much more. A new report by The Kaplan Group looks at federal data on low‑wage, high‑violation industries from Fiscal Year 2013 to 2025. It shows that the number of cases has gone down in the last five years. At the same time, the average back wages and penalties per case have climbed sharply.
Key Takeaways
- From Fiscal Year 2021 to 2025, total compliance actions fell by about 27.9%, but total back wages rose by roughly 18.5%.
- During that period, civil money penalties increased by more than 180%, pushing back wages per action to about $14,875 and CMPs per action to about $4,060.
- Over Fiscal Year 2013 to 2025, Construction, Food Services, and Health Care together accounted for roughly $1.41 billion in back wages, making them the largest chronic wage‑liability industries in the dataset.
Five-year trend: fewer cases, higher dollar impact
From FY 2021 to FY 2025, total compliance actions across the industries fell from 18,242 to 13,147, a decline of about 27.9%. Over the same period, total back wages increased from about $165.0 million to about $195.6 million, an increase of roughly 18.5%.
Civil money penalties (CMP) rose even faster. CMPs increased from about 19.0 million dollars in FY 2021 to about $53.4 million in FY 2025, a jump of approximately 180.9%. Back wages per compliance action increased from about $9,047 in FY 2021 to about $14,875 in FY 2025, while CMPs per action rose from about $1,042 to about $4,060 over the same period.
In practical terms, enforcement became less frequent but more expensive. A company may be less likely to face an action than in prior years, but when it does, the financial hit is more likely to be large enough to affect cash flow, vendor payments, and debt repayment.
Industries With the Largest Back Wages
Across the full FY 2013–FY 2025 period, wage-liability exposure is heavily concentrated in a few large, labor-intensive industries. Construction led with about $525.2 million in back wages over that period, followed by Food Services at about $477.0 million and Health Care at about $407.3 million.
Together, these three industries accounted for roughly $1.41 billion in back wages. They combine large workforces with significant enforcement activity, creating both frequent and costly cases that can influence payment behavior when liabilities come due.
FY 2013–FY 2025 wage enforcement by industry
The long-term data points to two different types of risk. Industries like Construction, Food Services, Health Care, and Retail show large cumulative exposure because they combine high employment footprints with a large number of enforcement actions.
Other industries, such as Temporary Help, Animal Processing, Utilities, and Warehousing, may generate fewer total cases but show very high dollar exposure per action, which can be more destabilizing for individual employers.
Where Wage-liability Pressure is Highest Now?
Looking only at FY 2025, the largest back-wage totals were again concentrated in a handful of sectors. Health Care recorded the highest back wages in the dataset at about $53.3 million, followed by Construction at about $43.4 million and Food Services at about $42.7 million. Together, these three industries accounted for roughly $139.4 million in FY 2025 back wages.
FY 2025 wage enforcement by industry
The FY 2025 data also shows why a simple ranking by total back wages does not tell the whole story. Temporary Help, for example, ranked sixth by total FY 2025 back wages but had only 129 compliance actions, producing an average of about $65,831 in back wages per action, the highest that year. Animal Processing had only 69 compliance actions but generated about $4.4 million in back wages and about $2.2 million in CMPs, working out to about $63,451 in back wages per action and 31,241 dollars in CMPs per action.
Why Does this Matter for Collections?
For collection agencies and credit departments, wage enforcement data is useful because it offers another way to think about payment risk beyond traditional financial statements. A wage-and-hour enforcement action can create immediate liquidity pressure, as businesses may suddenly need to pay back wages, penalties, attorneys, consultants, or payroll-system upgrades.
If the company is already operating on thin margins, those costs can affect vendor payments and receivables in the near term. This does not mean every company in a high-risk industry is a poor credit risk, but it does suggest that certain sectors may deserve closer monitoring, more careful payment terms, or faster follow-up when invoices become past due.
Methodology
This analysis is based on the U.S. Department of Labor’s “Low Wage, High Violation Industries” dataset covering FY 2013 through FY 2025. The dataset reports industry-level totals for compliance actions, back wages, employees receiving back wages, and civil money penalties assessed by the Wage and Hour Division.
Per-action figures were calculated by dividing back wages or CMPs by the number of compliance actions in each industry-year, and per-worker figures were calculated by dividing back wages by the number of employees receiving back wages. Dollar figures are rounded to the nearest whole number or million for readability; as a result, some percentages and subtotals may not add up precisely.
