Breaking the Law at work?

[SoundTribe]

have a dilemma.

 

I work at a soccer store in my home town and I feel like I might be breaking the law. My boss never had me fill out a w2 or w4 form, and has been paying me in cash since I've been working there. I've now gone about a month without getting paid and I'm starting to feel like he has no intention of paying me. I have asked him for my pay several times and he said that he doesn't have the money right now.

 

Looking back in retrospect, it was extremely stupid of me to accept an under the table job. But what's done is done, and I'm smart enough to know that if you make a poor investment, you need to cut your loses.

 

Should I call the cops? Or would I be implicating myself for accepting cash as well? Technically there is no evidence that I work there because I didn't even fill out a job application. But I also have a coworker who could serve as a witness in the case that they say I never worked there.

 

Any thoughts as to what I should do?

[Tony T]

If you were able to come and go as you please, you were contract labor and you will simply have to sue him in civil court to get your money. That can easily be done if you have witnesses and can show in some way that you performed the work.

 

If you were required to be at work at a certain time and to leave at a certain time, you were "on the clock" and a full fledged employee whom he was obligated to pay, withhold taxes and FICA, etc. In that case, tell him if he doesn't pay you that you will report him to the National Labor Relations Board who will fine him civilly and criminally. It is a criminal act not to pay FICA and withhold taxes, although the IRS usually doesn't enforce that if you pay up. It is also a criminal act in most states not to carry workmen's comp insurance on regular employees.

 

Of course, he may shoot you if you tell him you're going to report him so just be careful. He's in a lot of trouble either way. Once you get your money, don't count on him ever having you back again but at least you'll have your money. Chances are good he will never try to screw another person out of money.

 

If he tries to make a deal with you because he doesn't have all the money right now, by all means do that. The statute of limitations is two years so you have two years to report him if he doesn't pay you according to any deal you make with him. Make sure he gives you some of your pay now and the rest within sixty days...or whatever you agree to.

[amerikajin]

have a dilemma.

 

I work at a soccer store in my home town and I feel like I might be breaking the law. My boss never had me fill out a w2 or w4 form, and has been paying me in cash since I've been working there. I've now gone about a month without getting paid and I'm starting to feel like he has no intention of paying me. I have asked him for my pay several times and he said that he doesn't have the money right now.

 

Looking back in retrospect, it was extremely stupid of me to accept an under the table job. But what's done is done, and I'm smart enough to know that if you make a poor investment, you need to cut your loses.

 

Should I call the cops? Or would I be implicating myself for accepting cash as well? Technically there is no evidence that I work there because I didn't even fill out a job application. But I also have a coworker who could serve as a witness in the case that they say I never worked there.

 

Any thoughts as to what I should do?

 

I don't know the specifics, but it certainly looks like you're both breaking the law. The good part of taking cash under the table is that it's difficult for the IRS to catch you, although know that even with cash, they have ways to bust people flying under the radar -- it's just more difficult with cash. The bad part is, if you turn him in, you might be turning yourself in as well. Did you just start this job or have you been there a while? You will owe wage taxes and so forth if the IRS conducts an audit. Remember, too, that the state can also get involved. Witnesses will come forward and testify that you've worked there, so I wouldn't try that route. You could get in far worse trouble for lying about that as well.

 

Personally, if it were me, I'd probably just demand the money, and quit if I didn't get paid.

[curiousnycgirl]

wow it is rare that I disagree with both previous answers!

 

Firstly you can still be deemed contractor and told what hours your services are required. Secondly you have not broken the law - YET.

 

You can very easiy file a 1099 form, thereby letting the IRS know your income and then calculate your taxes owed and pay them - it's that simple. You can/should do the same for any gambling winnings - any income that is not otherwise reported.

 

You will have broken the law if you do not do the above by April 15th. The good news is, if your total income is below a certain threshold, you won't owe anything.

 

As far as cutting your losses, yes I think you need to find an new place of employment. I don't think you need to necessarily stop trying to collect the money he owes you - but why continue to increase the amount he owes?

 

Make sense?

[amerikajin]

wow it is rare that I disagree with both previous answers!

 

Firstly you can still be deemed contractor and told what hours your services are required. Secondly you have not broken the law - YET.

 

You can very easiy file a 1099 form, thereby letting the IRS know your income and then calculate your taxes owed and pay them - it's that simple. You can/should do the same for any gambling winnings - any income that is not otherwise reported.

 

You will have broken the law if you do not do the above by April 15th. The good news is, if your total income is below a certain threshold, you won't owe anything.

 

As far as cutting your losses, yes I think you need to find an new place of employment. I don't think you need to necessarily stop trying to collect the money he owes you - but why continue to increase the amount he owes?

 

Make sense?

 

I would have to know the specifics of his job description to be sure, but I feel pretty confident in saying that he is most likely not an independent contractor. Just because you want to declare yourself a contractor for tax purposes doesn't mean the IRS will see you as a contractor. As Tony said, W-2 employees generally have to be at the place of employment at a specific time, as determined by the employer, however, there's more to it than that. Contractors have to be able to realize a profit and a loss. Contractors generally have to be seen as performing a particular service for a business, person or group of persons, and that service also has to be made both available and known to the general public. So let's say, for example, he wants to declare himself a custodian contractor...among many other things, the OP would have to be observed doing that same kind of work for other clients. Contractors also use their own equipment to produce their work, which is one reason why they get special tax deductions. If he's not a contractor, he's a W-2 employee -- it's an "either, or" situation. If he's a W-2 employee and he's working under the table, then the IRS will collect back taxes. It's that simple. He can call up the IRS but they'll slam him as well.

[Trimmer]

OP - how long have you been working there? Has all of your employment been in this year, or does it extend back into 2007 or even farther?

 

If it's all in this year, and you haven't filed anything fraudulent yet (i.e. if none of this was happening in 2007 that should have affected your taxes for that year...) I wonder what would happen if you contacted the IRS and said, essentially, "I did this, and I want to know how to make it right..."

 

Maybe better yet, go sit down with a CPA and see if they can advise you on cleaning up your own personal liabilities to the govt. Then, knowing where you stand with the IRS may give you some leverage with your "employer."

 

No offense to anyone on this thread, but advice from "Internet CPAs" comes with the same warnings as that from "Internet Lawyers": if this situation is truly important in your life, go see a real one.

[amerikajin]

OP - how long have you been working there? Has all of your employment been in this year, or does it extend back into 2007 or even farther?

 

If it's all in this year, and you haven't filed anything fraudulent yet (i.e. if none of this was happening in 2007 that should have affected your taxes for that year...) I wonder what would happen if you contacted the IRS and said, essentially, "I did this, and I want to know how to make it right..."

 

Maybe better yet, go sit down with a CPA and see if they can advise you on cleaning up your own personal liabilities to the govt. Then, knowing where you stand with the IRS may give you some leverage with your "employer."

 

No offense to anyone on this thread, but advice from "Internet CPAs" comes with the same warnings as that from "Internet Lawyers": if this situation is truly important in your life, go see a real one.

 

How much would it cost to sit down with a CPA? If you have a good friend who's a CPA you might get a free consultation, but otherwise, that'll cost some cash.

 

Seriously, the best thing is to know the risks of working under the table and accept the consequences. People who work under the table may get tax free income but they're also leaving themselves wide open to get scammed.