No, it is not legal to fail to withhold taxes from an employee's paycheck or to report wages via tax form W-2, which she should be receiving this month for employment last year. She can contact the EDD to see if she was ever reported as an employee, which employers are required to do.
They say you get what you pay for, and this response is free, so take it for what it is worth. This is my opinion based on very limited information. My opinion should not be taken as legal advice. For true advice, we would require a confidential consultation where I would ask you questions and get your complete story. This is a public forum, so remember, nothing here is confidential. Nor am I your attorney. I do not know who you are and you have not hired me to provide any legal service. To do so would require us to meet and sign written retainer agreement. My responses are intended for general information only.
There are a few issues with your question. If your wife worked there in 2013, then employers are in the process of sending out their W-2s now, and it is typical to not get it until the end of January or early February 2013.
If she worked there prior to 2013 and never got a W-2, did she ever get a 1099? If she got a 1099, then she was considered an independent contractor instead of a employee. Some employers purposely misclassify their workers to avoid certain responsibilities owed to employees under the law.
If she did not even get a 1099, then she was probably paid in cash and worked as part of an underground economy and there is no record of her employment at all.
Whatever the case, if your wife was paid below what she was expected, she can file a wage claim to get back pay plus interest and penalties. But if she was paid what she was promised, and went on to file taxes as an independent contractor, she can file with the IRS to reevaluate her employee status and get a partial refund, as employers are supposed to pay half of an employee's contribution to Social Security. If it is determined that she was misclassified, the IRS will also go after the employer for the other unpaid taxes the employer should have paid for your wife and will credit her "Social Security Benefit Point Balance" appropriately. Use IRS Form 8919.
At the state level, you'd want to file a wage claim with the Labor Commissioner, as I imagine your wife did not get proper meal and rest periods, and possibly did not get paid overtime, etc....
See links attached.
This is an incomplete answer written in response to the limited facts provided. It is intended as a courtesy to better inform the reader about his or her possible rights and potential courses of action; it is not intended as formally researched legal advice or as an agreement to enter into an attorney-client relationship.
I agree with the answers above. Moreover, based on the additional information you provided that your wife was paid only via check and did not receive other documentation of her wages, I will assume she also did not receive an itemized wage statement that complies with California law.
Labor Code § 226 entitles employees to a written statement of gross wages earned, total hours worked, all deductions, net wages earned, inclusive dates of pay period, name of the employee and social security number, as well as the name and address of the employer.
If her former employer failed to provide an itemized wage statement that complies with the above, the employer may also be liable for penalties, per employee and per wage period.
Agreed. Perhaps you might visit a DLSE (Labor Board) office and tell them this story. They can advise you about your labor rights, and then you may have an option of proceeding with a complaint or engaging a private attorney. A private attorney may be very interested to hear if other employees were treated same way by this employer. This link may be useful for you: http://www.dir.ca.gov/dlse/districtoffices.htm
THIS IS A GENERAL ANSWER TO A GENERAL QUESTION AND SHOULD NOT BE RELIED UPON AS A FULL LEGAL ANALYSIS OF ANY FACTUAL MATTER. An attorney-client relationship is not established or offered solely as a result of this answer.