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Paying Under the Table

September 5th, 2017

“I occasionally pay people under the table when I have them participate in a working interview for 1-2 days before I decide whether or not to hire them. Once in a while, I also pay under the table when an employee is doing a different job for me on the side. Is there a better way to handle these situations to take away my risk?”

Your HR Survival Tip

Paying workers “under the table” means you are handing them cash and neither of you is reporting it (yet). There isn’t a way to take away your risk because what you are doing is illegal.

If your interview process includes having the candidate follow someone around for 1-2 days (shadowing) or actually performing the job for 1-2 days, this is compensable time. Paying this person cash instead of adding them to payroll could easily create problems for you. Yes, adding the person as an employee is more work than not doing it but that’s because you are only looking at the moment, not the long-term.

In the long-term, you need to look at a potential EDD audit because one of those people added you as an employer when they filed for unemployment. Whoops, EDD doesn’t show that person listed as one of your employees so they decide to audit you to see who else hasn’t been reported.

Your employees may have skills not needed for their usual job. However, you’ve realized one of those extra skills has value to you. The employee is  … Click here to read on >>

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