I've known the owner of an established Chinese restaurant for years. She recently agreed to give my high school son a part-time job helping up front and doing a few deliveries. When he got there, she said she would only pay him cash, $20 a night, and he could keep the tips from his deliveries. Why would she not make him fill out a W-9, and offer him a wage as a tipped employee? This has to be illegal, but what should we do? Is my son likely to get in legal trouble? I need to confront her in a knowledgeable way.
2007-10-28 08:58:28 · 10 answers · asked by tmitch 1 in Politics & Government ➔ Law & Ethics
your son is of school age, he is unlikely to get in trouble.
But the restaurant owner is another matter.
TAX
INSURANCE
WORK HOURS FOR MINORS
It depends on employment laws - countries differ
2007-10-28 09:05:36 · answer #1 · answered by steven m 7 · 1⤊ 0⤋
She obviously wants to avoid paying employment insurance, pension and any other premiums that must be paid for legal employees. Depending on where you live and how many hours he works a night, she may also be avoiding minimum wage laws.
I do not believe your son would get in much trouble as he is a minor and this is really more the employers resbonsibility. TO avoid any trouble, your son should file taxes at year end and claim the money he made. He may or may not have to pay taxes at the end of the day as there is a base amount you can earn before you are required to pay taxes. (Not sure down there but in Canada it is about $9,000.00 a year). You should advise your son that he should hold back about 20% of everything he earns in case he is liable for taxes. (If it turns out he isn't, well, its a great saving technique too!)
2007-10-28 09:40:07 · answer #2 · answered by elysialaw 6 · 0⤊ 0⤋
She wants to pay him cash because otherwise she'd have to list him as an employee. Employees are expensive. An employer has to pay social security, medicare, disability, keep track of his earnings, include him on feseral & state reports, and send out a w2. There's also workers compensation insurance and unemployment insurance.
Yeah its illegal to pay in cash and the employer can get into a lot of trouble if they're caught. Your son also wont have any of the benefits of being an "employee". But its so very expensive to have employees, its so much more then just a paycheck that small mom and pop places couldn't survive unless they paid "under the table".
Me? I'd let my son have the job.
2007-10-28 09:08:43 · answer #3 · answered by zclaz06 2 · 1⤊ 0⤋
It is illegal. She's dodging taxes that she'd have to pay your son. If she has 25 employees or more she might also have to pay health insurance. And she can lie and say he isn't working for her if the Feds ask. She's doing exactly what many employers do with illegal aliens.
My son went through this and was fired after a few months, he now knows that this is a bad situation.
The only thing you can do is explain why he should quit to him, have your son find another job and then leave this situation.
2007-10-28 09:07:16 · answer #4 · answered by dude 7 · 1⤊ 0⤋
There is nothing she can do -- or at least, she shouldn't do anything. That is one of the pitfalls of not being a citizen: you aren't afforded the same rights as citizens. Employers wouldn't pay full wages to non-citizens, because by employing illegal immigrants, they are taking a considerable legal risk, and a risk to their business' reputation. She and her employer are both engaged in illegal activities, and that being the case, it's best to not muddy the waters. Employment is "at-will," which means if she doesn't like it, she can quit. There is no need to go ruining somebody's business and livelihood for that.
2016-04-10 23:33:13 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yes, it's illegal, they're doing it to avoid paying Social Security and Worker's Comp taxes.
If your state's labor department gets so much as a phone call about this, they'll show up at the restaurant and do an audit. That's the last thing this restauranteur wants.
2007-10-28 09:03:16 · answer #6 · answered by Old Fat Bald Guy 5 · 1⤊ 0⤋
Yes it is illegal it is like paying under the table. That is what they do for illegals but it is cheaper for her. If she hires him she has to pay unemployment tax to the government and take out taxes from his check. He is just in highschool i would not confront her it is not a big deal and no one is going to jail over this
2007-10-28 10:27:57 · answer #7 · answered by Big Daddy R 7 · 0⤊ 0⤋
If your son makes over $500 in cash and tips, just have him pay taxes on the money he makes as if he is self-employed. Call the 800 number for IRS and order the proper forms.
2007-10-28 09:06:17 · answer #8 · answered by divabylaw 3 · 1⤊ 1⤋
It's called getting paid, 'under the table.' If you have a problem with it, have your son quit. Otherwise, let sleeping dogs lie. Your son has a job, that's a good thing.
2007-10-28 09:03:05 · answer #9 · answered by zipzeronada 5 · 1⤊ 0⤋
To avoid paying taxes...
2007-10-28 09:02:18 · answer #10 · answered by Yulik MahBaht 4 · 2⤊ 0⤋