No, it most certainly cannot. The Connecticut Department of Labor recently cracked down on subcontractors at UCONN who were paying their employees in cash to avoid taxes. Read this story here:www.courant.com. While being paid “under the table” may seem attractive because the employee also does not have taxes taken out of her paycheck, it means that the employer is not making contributions to Social Security and the unemployment insurance fund. Further, employees who are paid under the table are still responsible for paying income tax and need to track their wages and file a tax return or risk investigation by the IRS. This article from Forbes.com provides some tax tips for employees who are paid “under the table” or “off the books”
Can my employer pay me cash to avoid payroll taxes?
Posted by Hayber, McKenna & Dinsmore | Newsletters, Wage and Hour Law
As always, if you think your employer is violating the law, let us know!