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Unemployment and Cash Pay

Are you a nanny, housekeeper, estate manager, or someone else working inside of a home regularly? It may seem convenient to take cash or checks for your work without dealing with tax calculations and paperwork, but beware. This is considered being paid ‘under the table’ and could be a risky move. If this type of behavior is discovered, it could be something that you and your employer both cannot afford. 

What if you are terminated from your position and need to file unemployment?

You will not be able to gather employment benefits easily. Your state’s labor department will not have a record of your job. Why? Because your employer has not been paying unemployment insurance. This is a red flag that will cause the state to call your employer and ultimately could lead to a fine. This will hold up the amount of time it will take your benefit money coming in, which could be stressful and expensive for you. 

What happens if you are injured on the job?

If you are working under the table, you won’t have worker’s compensation insurance to rely on. The worker’s comp board in the state will have no record of you being employed, and this could translate to hefty fines for your employer for being non-compliant. Not to mention, you will be left with expensive medical bills or even the ability to not work for an extended time. 

What if you need to apply for a loan?

If you want to purchase a car or a home and need to apply for a loan, you will have difficulty, because you don’t have a legal work history. This could be avoided by having your employer pay you legally, on the books.

Being paid off the books might seem convenient at the beginning, but once you look at all of the negative complications that can come from it, it really isn’t convenient after all. Not to mention, it is illegal and could cause you and your employer a financial headache. 

If you have recently started working as a domestic worker, be sure you are being paid like an employee with all proper taxes withheld. Doing this will ensure you have things documented properly in the event you need to file unemployment, it gives you the legal work history you need for personal matters, and you’ll have social security withheld for later on in life when you want to retire.

Questions? Contact our team at Household Staffing and we will put you in touch with some of our experienced tax and payroll partners to help answer your inquiries. And if you want to look for a new job, we can help find the right one for you. Call us to get started. 

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