Paying Under The Table: What Restaurant Employees Should Know

Paying employees under the table, also known as cash-in-hand payments, is a common practice in many industries. Unfortunately, some restaurants also engage in this practice which involves paying employees in cash off the books, avoiding payroll taxes, and disregarding legal protections.

This article sheds light on the likely issues that arise when restaurant employees get paid under the table and provides guidance for those who find themselves in these situations.

Understanding “Paying Under the Table”

“Paying under the table” refers to the practice of paying employees in cash without reporting those wages to tax authorities or properly documenting the employment relationship. This practice allows employers to avoid various financial obligations, such as payroll taxes, workers’ compensation insurance, and minimum wage laws. While it may seem appealing to receive cash immediately without deductions, it can have severe consequences for employees in the long run.

Risks and Consequences of Paying Under the Table

• Limited Legal Protections

Employees who are paid under the table often miss out on vital employment protections. As an employee, when you are faced with issues such as wage theft, discrimination, or unsafe working conditions, you have the legal right to file a case against your employer for cases such as discrimination, unpaid wages, over time claims, etc. However, without a documented employment relationship, you may be left without recourse.

• Loss of Benefits

By not reporting earnings, employees miss out on Social Security, Medicare, and unemployment benefits. This can affect their future financial security, especially during retirement or in the event of job loss.

• Inadequate Record-keeping

When wages are paid under the table, there is often no official record of employment. This lack of documentation can make it challenging to prove employment history, which may cause difficulties in securing loans, renting apartments, or applying for government assistance.

• Tax Evasion Consequences

While it may seem tempting to avoid paying taxes, it is illegal. Both employers and employees can face serious penalties, fines, and legal consequences for participating in tax evasion schemes. It is important to remember that paying taxes is not only a legal obligation but also contributes to public services and infrastructure.

Protecting Your Rights as a Restaurant Employee

• Know Your Rights

Familiarize yourself with employment laws and regulations in your area. Understand minimum wage requirements, overtime rules, and workplace safety standards. Knowledge is power, and being informed will help you recognize and address any potential violations.

• Request a Written Agreement

Insist on having a written employment agreement that outlines your wages, hours of work, and any additional benefits. This document will serve as evidence of your employment and protect you in case of disputes.

• Report Any Violations

If you suspect your employer is engaging in illegal practices, such as paying employees under the table, report the issue to the appropriate authorities. This may involve contacting your state labor department or the Internal Revenue Service (IRS) to ensure your rights are protected and the law is enforced.

• Seek Legal Advice if Necessary

If you find yourself in a situation where your rights have been violated, it may be necessary to consult an employment attorney. They can guide you through the legal process, help you understand your rights, and advocate on your behalf.