It is not illegal for employers to pay employees in cash, reports About.com, although this practice can get business owners in trouble with the government over tax evasion. Employers also risk running afoul of worker's compensation laws. To avoid legal troubles, employers must keep detailed records of all cash payments to workers.Continue Reading
About.com notes that employers are required to pay all payroll taxes when paying cash to workers. This includes Social Security and Medicare. Business owners caught avoiding payroll taxes can be prosecuted if they falsify tax forms. For instance, Knoxvillebiz.com wrote about one business owner who pleaded guilty to misrepresenting wage information on his tax form to avoid payroll taxes. Under-reporting wage income is a crime that carries stiff fines and may include jail time as well.
Employers may also get into legal hot water if a cash-only worker's actions trigger an audit, About.com warns. For example, a problem arises if a worker who is "not on the books" becomes injured on the job and seeks medical attention. When the worker reveals to doctors that the injury is work related, officials are bound to discover the employer's failure to pay into worker's compensation. Similarly, a worker who files for unemployment or disability benefits after working "off the books" is likely to trigger an audit of the employer.Learn more about HR
Basic guidelines from the United States Equal Employment Opportunity Commission include a variety of laws and regulations that require employers to offer the same pay rates and work opportunities to all potential and current employees regardless of factors outside of job performance or skill levels. This includes legislation against acts such as denying someone a job due to religious belief or offering a higher pay rate to an employee due to race.Full Answer >
Employee assistance program (EAP) refers to a service provided by employers that is designed to help their employees deal with the personal or work-related problems. The service provides counseling and assistance with regard to mental health issues, marital problems, substance abuse or financial troubles.Full Answer >
U.S. Department of Labor regulations allow employers to ask employees requesting family medical leave to provide information about their health care provider, a description of the medical condition and prognosis, or other reason for the request, and the amount of leave requested. Requiring a physician's signed statement is also allowable.Full Answer >
The information that employers can disclose about former employees is regulated by state law, and varies from state to state. Most states allow information about job performance to be disclosed, at a minimum.Full Answer >