Is it Legal in California for Employers to Pay Under the Table?
Often, when an employer pays an employee in cash, they pay them “under the table,” a shorthand for paying the employee without deducting or withholding anything. It is illegal to pay under the table in California.
If you are being paid under the table, request that your employer begin paying you on the books as soon as possible. If your employer refuses to comply, or if you have been mistreated by an employer paying you under the table, contact the Bibiyan Law Group, P.C. today. When employers pay under the table, proving what they owe you can be challenging. Our experienced employment attorneys can help design a strategy to fight for the compensation you are due.
Paying Under the Table
Another term for paying under the table is paying off the books. This term drives home one of the biggest risks when employers pay under the table: lack of record keeping. Employers paying employees under the table rarely keep accurate records.
Some employees may like being paid under the table to avoid paying taxes. Another common reason is the employee is undocumented and not legally authorized to work. Whatever the reason, the legality of paying California employees off the books is not in question. Paying under the table places both employers and employees at risk.
Required Wage Information in California
Every time you receive a paycheck in California, you must also receive a statement with the following information:
- Gross wages earned,
- Total hours worked (unless an exempt salaried employee),
- Hourly wage,
- All deductions,
- Net wages earned,
- Pay period dates,
- Name of employee and the last four digits of their social security number or employee identification number, and
- Name and address of the employer.
- Unemployment insurance (UI),
- Employment training tax (ETT),
- State disability insurance (SDI),
- Personal income tax (PIT),
- Federal income tax,
- Social Security and Medicare taxes, and
- Federal unemployment (FUTA) tax.
Employers often also deduct payments for employer-provided health insurance, life insurance, or retirement accounts.
When employers pay under the table, they do not provide wage statements. They also fail to deduct or withhold what the law requires.
Penalties for Employers
Paying under the table can lead to serious consequences for audited employers. Businesses paying employees under the table frequently fail to keep consistent and accurate records, which can result in the employer owing the employee’s share of tax liability if an auditor cannot determine what employee was paid how much.
California employers paying under the table may owe, among other things, penalties for:
- Failure to file,
- Failure to register,
- Failure to issue wage statements, and
- Failure to file electronically.
You will likely owe additional penalties under federal law. If the government concludes you intended to avoid paying taxes, you may also be subject to criminal prosecution.
Risks to Employees
All too often, when employers pay under the table in California, they do not just fail to deduct what they legally must. Often, the employer will:
- Deduct items they are not legally allowed to deduct,
- Fail to pay part or all of what they owe,
- Delay payments,
- Pay less than the agreed wage, and
- Fail to pay overtime.
If your employer is not fairly compensating you, you may be able to recover:
- Unpaid wages and overtime pay,
- Interest on wages, and
- Attorney fees.
epending on the circumstances, you may be entitled to additional damages. An experienced employment attorney can help determine what you are entitled to.
The Bibiyan Law Group, PC Is Here to Help
Employers that pay off the books fail to pay employees what they are owed. At the Bibiyan Law Group, P.C., we are passionate about fighting for fair treatment of every employee in California. Our team of almost 20 lawyers focuses exclusively on employment disputes. Every year, we recover tens of millions of dollars for our clients. Reach out today to learn how we can help.