There are laws in place which require employers to provide certain benefits to paid employees. One of these benefits most workers can expect when working is workers’ compensation. Workers’ compensation insurance is provided by employers to ensure any worker injured on the job has access to compensation in the form of paid medical expenses and lost wages. Despite laws requiring employers to provide this insurance coverage, many companies find ways around this cost by paying workers off the books.
When a worker receives cash payment for work performed, there is a good chance they are not being paid on the books. Some employers do this to avoid paying taxes and other costs that come with paying workers “on the books”. By paying cash or other forms of compensation, the employer can save money on their end. Unfortunately, despite the fact that the worker also pays no taxes on wages earned, the employee is also usually not covered by any benefits as well.
A worker paid off the books most likely receives full compensation for their work, however extra money received by not paying taxes is rarely worth the trade off. Not only are your hours, months or years worked under the table not counted toward your future social security benefits, an employee not paying into other programs cannot receive the benefits of those programs should they be in need of them in the future.
Consider the worker who is paid under the table (off the books) who finds themselves injured on the job. If the employer has not bee paying workers’ compensation insurance for that worker, there will be no recourse in terms of disability or medical payments. Although this practice is found in any industry, certain areas of work are more likely to pay their employees off the books. Construction workers, seasonal workers and many other industries routinely pay their workers off the books, effectively eliminating any chance those workers will receive the benefits to which they are legally entitled should an injury occur on the job.
