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"Employee slacking" is not illegal, but wage theft is.

kinda depends on what type of "slacking" we're talking about. so called "time theft" is essentially fraud, which is definitely illegal. usually not worth the effort to prove when you can just fire people.

I did this as a kid. I was 11 years old and hired by a country club to clean restrooms and the grounds around the swimming pool during the summer. I had to be in and out before the first guests arrived because I wasn't a member. They decided to pay me $1.85 an hour when the minimum wage was $3.35 or so at the time, but I had no bargaining power because I was legally under age. Our timesheets were paper and the club had no surveillance, so I gave myself 1.5 hours of work every day because I was a quick worker (the person I alternated with took more time anyway) and they were assholes.

Do you think salaries are based on employees giving 110% effort every day?

People have off days, get bad sleep, get sad etc. All of this is (must be) factored in already. You don't owe them for being human.

Now subtract unpaid overtime.