Sometimes you might think getting paid under the table is the way to go. After all, it’s (ostensibly) unreported cash, so no taxes, right? (Wrong.)
Sure, there may be valid reasons why you want to be paid off the books, but no matter how good your reasons are, not reporting your income is, generally, illegal. There are plenty of reasons why employers would want to avoid under-the-table employees, and vice versa, but the tax trouble tends to be at the top of the list for both.
Then again, employees getting paid under the table may be reluctant to report any labor violations, for fear of incriminating themselves (and for more than just accepting under the table wages). It is illegal for (most) employers to pay (most) employees under the table, but can you report them? And if so, how?
Fair Play, and Fair Pay
The federal Fair Labor Standards Act (FLSA) requires that qualifying employers pay at least the federal minimum wage, as well as “time and a half” overtime pay for employees working more than 40 hours a week. Local and state labor laws can be even more restrictive and include employers the FLSA omits. While not all employers fall within the FLSA’s guidelines and some employees are considered “exempt” from FLSA standards, the general rule is that employers are required to compensate employees for their time, as well as pay state and/or local unemployment taxes for each employee.
Therefore, paying employees under the table — usually in cash and unreported to state or federal revenue services or labor boards — is illegal, even if it’s seen as a win-win by both parties. So, what do you do if you if you’re on the losing end of an under-the-table bargain?
Under the Table Pay, Above Board Reporting
If you’ve been denied proper pay or benefits under federal law, you can file a complaint with a local office of the Wage and Hour Division (WHD) of Labor Department, including:
- Your personal information, including name, address, and telephone number;
- Your employer’s name, address, telephone number, and type of business;
- Your job title and description of work done;
- Payment information, including how much you’re supposed to be paid, the method of payment, and how often wages are paid; and
- A description and dates of the alleged violations.
States may also have their own divisions enforcing particular state labor statutes. So, if you or someone you know has been denied proper wages or is being illegally paid under the table (even if you’re worried about your own employment status or if you’ve taken money under the table), contact a local employment attorney for help (particularly if you’re concerned about retaliation).