Paying cash wages “under the table" means the payment of wages to employees by cash, check, or other compensation, that is disguised with the intent of avoiding the payment of payroll taxes. Certain employers engage in this practice to avoid tax and insurance expenses associated with payroll and to create an unfair competitive advantage. Moreover, some employers might pay certain part of wages with cash, such as overtime. Whatever the case might be, this practice is illegal and the offending employer could be criminally prosecuted.
This practice is simply not an option for either the employer or the employee. Employers have a legal obligation to withhold payroll taxes and must report your employees’ wages. Any employee who accepts this arrangement will also be prejudiced in many ways. For instance, you may be audited by state and federal government for not reporting the wages. When you file for Unemployment or Disability Insurance, your benefits may be delayed or denied. You also will not have any W-2s, paycheck stubs or other documents to verify the earnings.