In California employment laws safeguard workers' rights and help provide fair treatment. While being paid wages in cash is not inherently illegal, it can signal potential violations of labor laws. If you are an employee in California that is being paid in cash, it’s important to understand how cash payments in California may lead to under-the-table payments and violations of labor laws. Nichols Law Firm has experience handling litigation involving employees who are paid in cash and can help you understand your rights. If you are a California employee being paid in cash, call Nichols Law Firm today for a free consultation.
Understanding Cash Payments
Cash payments offer convenience but can also create an environment prone to labor law violations. While not all cash payments are illegal, they raise suspicions of employers engaging in unlawful practices, exploiting employees, and undermining their rights and protections. Cash payments often indicate attempts to evade legal obligations, such as withholding or paying taxes. Signs of under-the-table payments include:
Lack of Payroll Records: Cash payments lack the paper trail of traditional employment records, making it difficult for employees to verify their earnings and ensure proper wages are being paid. In California, Labor Code §226 requires employers to provide an accurate itemized wage statement reflecting all hours worked and wages paid, however in situations where cash payments are being made, employers often fail to provide proper wage statements.
Unreported Income: Paying employees in cash allows employers to avoid reporting wages and withholding taxes, depriving employees of benefits like Social Security contributions and unemployment insurance. This can create problems for California employees who need to verify their income to obtain financing or make a purchase.
Non-Compliance with Labor Regulations: Employers paying under the table frequently neglect other labor law requirements, such as their duty to provide meal and rest breaks, overtime pay, and to pay minimum wage. This leaves California employees financially vulnerable and prone to exploitation when being paid under the table.
Consequences for Employers
Violating California labor laws carries severe penalties for employers, including:
Legal Penalties: Employers who are paying employees in cash and under the table may be liable to their employees for unpaid wages, meal and rest break premiums, inaccurate wage statement penalties, waiting time penalties, other damages, and attorney fees. If this is an employer’s system for paying all employees, this could subject the employer to a wage and hour class action lawsuit, or a Private Attorneys General Act (PAGA) Claim, which could lead to huge liability for the employer.
Damage to Reputation: Unlawful employment practices harm an employer's reputation and can deter potential employees from wanting to work for the business. Negative publicity and legal consequences affect business viability and success.
Protecting Employees' Rights
To safeguard their rights in the workplace, employees should:
Keep Records: California employees should maintain detailed records of their work hours, wages received, and other employment information for potential evidence in disputes or investigations. Even if the employer doesn’t track the time worked by the employee, the employee should keep their own records of the hours worked and amounts paid in case this information is needed.
Seek Legal Counsel: Consult with an experienced San Diego employment law attorney if you suspect under-the-table payments or other labor law violations are occurring at your workplace. Nichols Law Firm, APC can help evaluate your situation and pursue legal action if necessary.
Cash payments in California are not inherently illegal but can be indicative of under-the-table practices and California Labor Code violations. Employees must be vigilant, protect their rights, and take action if they suspect wrongdoing. If you are being paid in cash and have questions about your legal rights as a California employee, call Nichols Law Firm today for a free consultation.
