It’s not necessarily illegal to pay employees in cash; however, most of the time what comes along with paying someone in cash is illegal. California Labor Code 226 requires employers to provide paystubs that include: gross wages earned, total hours worked, the number of piece-rate units earned, all deductions, net wages earned, dates of the pay period, name of employee and last 4 digits of their social security number, name and address of the employer, name and address of legal entity that secured the services of the employee, and the hourly rates. If you do not receive or have access to a paystub, which mainly happens when an employer pays in cash, then it’s considered being employed off the books, which is illegal. If you are being paid in cash off the books, then yes, you can sue your employer.
In California, about 1 in every 6 employees is paid under the table in cash. It’s most common for construction workers to face this kind of payment. Unfortunate statistics show that off the books construction workers earn only a little over half of what their accounted for counterparts earn. Employers will usually perform this illegal method of payment in order to avoid paying taxes of their own. Some employers try to be sly in their tactics by not outlining the hours worked on a paystub in order to avoid discrepancies and prevent employees from seeing if they worked overtime and should be paid more. If there’s no paper trail, how can you dispute your wages? It’s a very disturbing strategy to basically rob employees of their wages. It’s also common for these types of unlawful employers to overwork their employees and not provide the necessary wage change. California law requires employees to be paid overtime, which is 1.5 times their normal rate if they work either over 8 hours in a day or over 40 hours in a week. Employees being paid cash are likely not receiving this kind of wage increase.
To discuss your claim with the employment attorneys at California Labor Law Employment Attorneys Group, contact our law firm today.
Is it illegal to be paid in cash?
Another illegal action that quite frequently goes hand-in-hand with being paid in cash by your employer is that the employer most likely did not report the payments to the IRS. Employers are required to report all wages to the IRS and pay payroll taxes. The Federal Unemployment Tax Act (FUTA) requires all employers to pay unemployment taxes. If an employer has paid at least $1500 in wages within a calendar quarter in the current or previous year, then they must adhere to this law. The maximum and employer would pay is $420 per employee, and the minimum is $42 per employee. Employees do not have to pay this tax. So as an employee, you don’t have to worry about this tax, but it’s good to be aware of the tax laws to make sure you are working for lawful employers.
There are many penalties for an employer illegally paying an employee. An employer can be fined up to $100 for every paycheck they do not adhere to Labor Code 226’s requirements for a paystub. Furthermore, if there are not accurate records of your wages, and you file a worker’s compensation claim, your employer may be subject to being audited. Similarly, if you file for unemployment benefits and your employer cannot provide accurate documentation of your wages; this too can lead to an audit.
Is it Legal to Pay Employees in Cash?
If you ever have the need to collect unemployment benefits, and there are no records of your wages, you may be forced to face some difficult roadblocks. While unemployment is not desirable, it’s something all employees should be prepared for. You never know when life decides to throw a curve ball at you. Requirements for unemployment benefits are based on previous wages. In order to calculate and determine your unemployment benefits you must prove your last source of income. Maximum benefits are given when an employee can prove they have made over $26,325 in a calendar quarter. Not being able to provide evidence of your wages will make receiving unemployment benefits very hard. This is why you should be aware of your employer’s payment practices in order to protect yourself from potential issues down the road. If you know you’re not getting paystubs then you need to talk with one of our employment lawyers to start filing a claim against your employer.
Another area of concern may come during tax season. How can you file your taxes without evidence of how much has been taken out of your wages? Or if taxes weren’t taken out from your cash payments at all, you may face more legal battles. Protect yourself by speaking with one of lawyers today!
Our attorneys are ready to represent you and provide you with the legal assistance that you need. If you were wrongfully terminated from your job, you must contact our employment experts as soon as possible. Our firm offers both free consultations and free second opinions.
Can I Report My Employer for Paying Me Under the Table?
It’s clear the State takes wages very seriously based on these penalties, so as an employee you should take them just as seriously too. If you are being paid in cash and you know that your employer is not properly documenting your wages or paying taxes, then you may be eligible to file a claim against them. One of our attorneys at California Labor Law Employment Attorneys Group will turn you in the right direction because we understand the importance of being paid legally and receiving the full compensation you deserve. Chances are, if your employer pays you in cash, they are doing it in an illegal manner and may be trying to snub you from what is rightfully yours.
While being able to physically feel the crispness of cold hard cash in your fingertips may be much more aesthetically pleasing than seeing a number appear on digital screen that represents your bank account as a result of a direct deposit, is it really worth it? Would you really want to give up possible compensation just to possess material cash? We hope the answer is no, because we value your work, and believe you deserve to be appropriately and legally compensated for it.
Free Consultation and Zero-Fee Guarantee
Our skilled employment attorneys are ready to represent you in your fight for fair wages. California Labor Law Employment Attorneys Group wants you take pride in your work. You are not fully enacting that pride by accepting illegal and lesser wages. We know that jobs can be demanding and mentally and physically exhausting. Do not sell yourself short and allow to be taken advantage of by unlawful employers. Think of all the money you could redeem for your labor. You’ve already been cheated of so much, and we do not want that to happen again. This is why we will provide you a free consultation on your case. We also have a zero-fee guarantee, where there are no upfront payments and you won’t have to pay us anything unless we win your case. If you’re already working with a labor lawyer, we can still present you with a free second opinion. It’s time to stop putting up with being paid in cash by your employer. Let’s begin your journey to earning the just fruits of your labor.