Can I get in trouble for getting paid cash in California?

Some staff in California like to work out their salaries in cash as it can be incredibly convenient, they can go around banks and bank fees or it is easier to control their finances. However, there are some important legal considerations around getting paid in cash that employees should keep in mind:

 

Tax Reporting Requirements

 

Your employer must give you a Form 1099 if he/she paid you over $600 per year. By law, he/she must do so in order to report your earnings to the IRS and to both of you upon receiving your tax returns. This is all inclusive to any type of payment such as with cash, check, or any other form. If you do not report your money wages that were not reported to the IRS, it could be treated as tax evasion with consequences being criminal under both the United States tax law and the State of California tax law.

 

Impact on Benefits Eligibility

 

Earning cash in hand, without being officially registered, has a consequence of brushing you off the list of people who are usually considered for various compensations, payments, benefits, like unemployment insurance, disability pay, or social security, because there will be no official record showing your earnings. Be well aware of what risk and benefits you may be losing if you choose a form of payment that is out of book.

 

Violations of Labor Laws

 

If you are only receiving your payments in cash, you might be working in a workplace where other labor laws, like minimum wage and overtime pay, are not being abided by. California has tough rules concerning the accurate capturing, figuring out and provision of employer legal requirements of wages and work conditions terms and conditions. Letting cash circulate in this system may be the sign that the acts of smuggling are being conducted.

 

Protect Yourself

 

If you do receive cash payments, be as careful as possible by getting proper documentation for all cash received, keeping daily pay records, and make sure that the necessary tax evasion is being imposed and that taxes are withheld from the total payment received. Learning about and acting within your employee rights is the best way to protect yourself.

 

The short answer is it’s unlikely you will cause problems as long as you are paid in cash and you are not participating in money laundering or drug trafficking. However, make sure that your gross pay is reported properly, and you’re getting what you’re entitled to in terms of legal pay and benefits. There are bigger costs of revenue avoidance or regulation infringements. Recognizing the trade-offs is key to the issue.