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Can my boss cut my hours because i asked to be paid on payroll instead of under the table?

Visalia, CA |

ive been working for this company for over a year. my boss started me off under the table until she decided she was going to keep me or not. she hired me on full time and pays me half cash , half under the table, after filing my taxes i realized is no benefit being paid under the table. last week i asked her to put me completely on payroll . first she said i would have to wait for next pay period because she already paid her payroll taxes for febuary . now shes telling me instead of working me 5days a week she can only afford to pay me 1 or 2 days a week. is this legal? i feel like im getting screwed for wanting to do it the honest legal way

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Attorney answers 4

Posted

Looks like this employer is knowingly violating the law to avoid paying taxes, covering you with workers' compensation insurance, and get out of making contributions into YOUR accounts for unemployment benefits, Social Security, and more. I suggest you start looking for another job right away because this one is limited. This employer has already indicated she is not going to pay you much and not going to pay you fairly or as required by law. And it is likely she is violating other laws, too. When it all comes to a head, she (or her business) may file for bankruptcy and walk away from her obligations.

It is illegal for an employer to retaliate against an employee who complains about illegal pay practices. There are penalties against the employer and the employer may even be charged with a crime.

You will need documentation to support your case. Keep your documentation at home, not at work, to make sure it remains private and doesn't disappear. For documentation:

Keep track of all the information related to this situation. Write down the details using names, dates, location, witnesses, times of day – as much as you can. Save copies of any documents.

For every work day, keep a log of all your work time, including the time you start working, the time you stop working, and the start and stop times of any breaks (meal or rest). Time spent walking to or from a time clock is considered work time, not break time. Many people find it helpful to keep this information on a calendar.

For every work day, keep track of the actual work duties you perform and how much time you spend on each duty.

The Division of Labor Standards Enforcement (DLSE) is a sub-agency within the California Department of Industrial Relations. http://www.dir.ca.gov/dlse/. Some people refer to the DLSE as the Labor Commissioner. The DLSE enforces California's wage and hour laws, including those pertaining to overtime, rest and meal breaks, and more. The link for information on filing a wage claim is here: http://www.dir.ca.gov/dlse/howtofilewageclaim.htm. You have THREE YEARS from the last day of work to file a Labor Commissioner claim for unpaid wages.

If you pursue a lawsuit in state court, you have the potential to recover unpaid wages going back FOUR YEARS (instead of three) from the date you file suit, per Business & Professions Code sections 17200 et seq. To find a plaintiffs employment attorney in California, please go to the web site of the California Employment Lawyers Association (CELA). CELA is the largest and most influential bar association in the state for attorneys who represent working people. The web site is www.cela.org. Click on "Find a CELA Member" and you can search by location and practice area. Many CELA attorneys represent clients throughout the state.

Note that if you have not been paying taxes on the money you've earned over the past year, you will have to pay them. It will feel like a heavy blow because the bill will come all at once. However, you should be able to work out a payment plan with the federal and state taxing authorities, especially because you are actually a victim here. Be as cooperative as you can be.

@MikaSpencer * * * PLEASE READ: All legal actions have time limits, called statutes of limitation. If you miss the deadline for filing your claim, you will lose the opportunity to pursue your case. Please consult with an experienced employment attorney as soon as possible to better preserve your rights. * * * Marilynn Mika Spencer provides information on Avvo as a service to the public, primarily when general information may be of assistance. Avvo is not an appropriate forum for an in-depth response or a detailed analysis. These comments are for information only and must not be taken as legal advice. Legal advice must pertain to specific, detailed facts which are impossible to gather on a public web site like Avvo. * * * No attorney-client relationship is created based on this information exchange. * * *

Posted

Ms. Spencer provides a good summary of the law related to your issues.

I wonder whether your employer gave you a 1099 for the money that she paid you in cash.

best of luck

Posted

As MS. Spencer pointed out, it is not legal. It is very illegal.

Not only is there no benefit to you to be paid under the table unless you do not report your income, but you are actually losing money. Every employer pays part of the taxes for an employee in addition to the amount that is withheld from the employees check. Most employees do not realize that their employers actually pay employment taxes in addition to what is seen on the pay check stub.

By not having you on payroll, your employer is probably not paying your Medicare, Social Security, Workers Compensation, Unemployment, and FUTA or Federal Unemployment. If you report your earnings on your taxes you may have to pay some of these taxes that your employer is supposed to be paying.

Additionally, if you do lose your job and try to get unemployment, there could be a very bad rude awakening there as well. You may not even qualify for unemployment or your wages may be under reported which would give you less benefits. The same goes for disability as well.

At a minimum you should discuss with an accountant how much money from a tax point of view that this is costing you and that money should be paid to you by your employer.

Kevin A. Spainhour, Esq. Spainhour Law Group www.slglawyer.com.

Posted

All good answers. Your employer is barred from entering into an illegal agreement, and even if you go along you may still recover all that you are owed. The tax consequences are real for you and for your employer. As advised talking to an accounted is a good idea; however, your employer will likely be liable for both the employer and employee portion of the employment taxes as well as other contributions that you should have been making as an employee.

When an employer takes an adverse employment action against you for requesting that they follow the law they are engaging in retaliation. In California before you can sue an employer for discrimination you must file a complaint with Division of Fair Employment and Housing (DFEH). You may also file a claim with the Bureau of Labor for unpaid wages. Since your employer is already reducing your wages you should file complaints with both agencies. You may also want to explore a report to EDD for tax fraud by your employer. Of course you will need to make sure you have paid all of your own taxes.

Since some of your details are not clear, you should consult a labor/employment attorney to clarify any potential liability you may have for taxes, and to determine a course of action to make sure that your entitlements are all fully funded by the employer.

Marilynn Mika Spencer

Marilynn Mika Spencer

Posted

The Department (not "Division"), as Mr Harvey said, of Fair Employment and Housing is not the place to pursue any claims you may have against this employer for paying you under the table and the many wage and hour violations involved. The DFEH investigates claims of discrimination, harassment and retaliation based on race, color, religion, sex, sexual harassment, sexual orientation, marital status, national origin (including language use restrictions), ancestry, mental or physical disability including HIV and AIDS, medical condition (cancer and genetic characteristics), age (40 and above), requests for family leave, requests for pregnancy disability leave, and retaliation for reporting patient abuse in tax-supported institutions. It has no jurisdiction (power to act) over wage claims. When Mr. Harvey referred to the "Bureau of Labor," he must have meant the Division of Labor Standards Enforcement, which does have jurisdiction over wage claims. I referred to this agency in my original response.

Randy Jay Harvey

Randy Jay Harvey

Posted

DFEH will investigate "retaliation" against employees for advocating for employment rights. You may also file your claim with the state version of the Bureau of Labor which is the Division of Labor Standards Enforcement. Claims may be raised either under the Fair Labor Standards Act or California Wage and Hour laws.

Marilynn Mika Spencer

Marilynn Mika Spencer

Posted

Mr. Harvey, respectfully, you are incorrect. Perhaps in your state, a similar agency does as you say. In California, the DFEH does not do so. It doesn't even have the funds to investigate what it is charged with investigating. And if the asker were to search for the California "Bureau of Labor," ultimately the asker may get to the Bureau of Field Enforcement, which is within the DLSE, but there is no "Bureau of Labor" here in California. Finally, in nearly every instance, the California Wage Orders and California Labor Law provides greater employee protection and better remedies than the federal Fair Labor Standards Act. There is no benefit to the asker if we on Avvo provide incorrect or misleading information.

Randy Jay Harvey

Randy Jay Harvey

Posted

Respectfully, in 2009, I had a case in Sacramento California wherein DFEH investigated a claim of retaliation for a demand for wages. I agree that DFEH has no funds at present to investigate nearly anything and most clients simply request a right to sue. You are correct, I confused Oregon's Bureau of Labor with California's Department or Industrial Relations, Labor Commissioner's Office--no doubt a product of practicing in two jurisdictions. I also agree that California labor codes and laws provide greater recovery for plaintiffs than do the FLSA. California and Oregon are my states, I practice in Sacramento and Northern California and Oregon. Thank you for clarifying my responses.

Marilynn Mika Spencer

Marilynn Mika Spencer

Posted

If the underlying issue is within DFEH's legal mandate, DFEH has the legal right to investigate related events. For example, if someone alleges his employer retaliated against him when he made a wage demand but did not retaliate against others who are a different race, religion, sex, etc. when they made a wage demand, then DFEH has jurisdiction because it is legally mandated to investigate discrimination claims based on race, religion, sex, etc. Otherwise, DFEH has no legal authority to investigate or act on a wage claim. From the DFEH web site: " The Department of Fair Employment and Housing only investigates employment, housing and public accommodations discrimination and hate violence pursuant to the California Fair Employment and Housing Act (FEHA), Unruh Civil Rights Act, Disabled Persons Act, and Ralph Civil Rights Act. The Department has jurisdiction over both private and public entities operating within the State of California, including corporate entities, private sector contracts granted by the State of California, and all State departments and local governments. If you feel you have been or are being discriminated, harassed or retaliated against based on a "protected class", please contact us. " http://www.dfeh.ca.gov/Other_Issues.htm. No need to respond to this message.