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When an employer pays an employee

New Rochelle, NY |

when an employer pays an employee their weekly pay check; but then writes a separate check for a different amount each week to same employee and calls it expenses , when it is not....is that legal?????

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Attorney answers 4

Posted

If it is for work performed, then the check must include deductions for withholding taxes. Otherwise, it violates the law.

Posted

If the check is being called reimbursement for expenses and it is actually salary, that is not proper.

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Posted

If it is for expenses it will still be reported to the government. If it is not for expenses, then maybe a 1099 issue if independent contractor. I suggest you speak with a CPA. Why not give them a credit card for business expenses?

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Ariel Elaine Solomon

Ariel Elaine Solomon

Posted

If the check actually represents reimbursement for expenses it is not improper. However, if the remuneration actually represents salary for services performed, the employer is responsible for mandatory withholdings.

Posted

If I understand your question correctly, the employer is giving the employee a weekly check which purports to be for expenses, but it is not actually an expense reimbursement. If an employer disguises compensation as expense reimbursement for the purpose of committing tax fraud, that is a violation of the Tax Code and can be prosecuted by the IRS and Department of Justice. However, in practice, the government is more likely to simply reclassify the checks as compensation.

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