job paid under the table

OperaDad
Fri, 05 Jun 2009 07:34:33 +0000

By the way, the kicker is, they pay her less than minimum wage because she does not have the “tax burden”.



Tell them she should be paid more than minimum wage because her tax burden will be HIGHER, not lower. Say that she will report the income. If she reports the income, then she will be subject to the Self Employment Tax of 15.3% rather than the 7.65% Social Security tax.

If she plays it straight, then she has a paper trail to prove she is really an employee. As such, she would be entitled to Workman’s Comp. She sues the store, and it should be fairly easy to establish that she was an employee. The Insurer will then have to sue the store for fraud.

However, it is my understanding that workman’s comp actually limits liability, rather than granting employee benefits. If they claim she is not an employee, then they would be liable for full costs without limits. For instance, if she is killed, workman’s comp may limit liability to $100,000. However if she is not an employee, then you can sue for a lot more than that.



My quandry is this, obviously, she can not put on a college application that she has worked up to 20 hours per week

I was unaware the IRS cross-referenced with college applications when doing audits.



Assuming she doesn’t report the income, it is not an IRS issue, it is a FASFA issue. The discrepancy may come up in the review for financial aid. If she worked 20 hours per week, why doesn’t the income show up on her FASFA?