# Employees



## OhioPaver (Jan 30, 2003)

We are a seasonal paving company & the only people that plow now are are salery employees, (field & 1 saleman) when we grow how do we pay the others guys without messing up the un employment, any ideas


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## Mick (May 19, 2001)

Cash - under the table.


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## nben (Jan 22, 2003)

I'd be careful about the under the table stuff, check this out
http://www.thejournalnews.com/newsroom/012903/b0129fraud.html


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## Grshppr (Dec 2, 2002)

I read that story on lawn site. Pretty scary! Definately will make me think twice about paying cash!


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## Grshppr (Dec 2, 2002)

What I do sometimes is pay part cash, and part on the books. I'll pay out what ever cash I get from customers, and pay the rest as regular wages. This helps them out a bit as they have less income to report to UI. I don't know after reading that story I think I'll be sticking to the straight and narrow from now on...


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## PINEISLAND1 (Dec 21, 1999)

Nice to see someone enforcing that !

It does tend to thin out the lower end of the food chain in the business. The kind that gives the rest a bad reputation.


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## Mick (May 19, 2001)

I wasn't really advocating paying under the table. It is a big part of the economy up here, though. There are a lot of people working in the woods, commercial fishing and carpentry that work under the table. The question was - How do I pay people without "messing up" unemployment? Unemployment is intended to supplement wages "lost" due to no fault of the worker. If you're getting paid for plowing, there is no, or reduced, basis for collecting unemployment. Typically, the amount of unemployment will be offset by an amount equal to wages paid for the week. Hence, the only way to "protect" the unemployment is to not report any wages. 

Actually, working under the table leads to other problems for the worker. Like no entitlement to Social Security in old age. I've run into a couple of guys in that situation when they're too old to work and it's really sad. They worked hard all their lives and now have nothing. It can also lead to problems with the IRS - "Failure to file or report income".


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## PINEISLAND1 (Dec 21, 1999)

I am working, and paying through taxes for a program that helps those who have temporarily lost their jobs. I will accept that, if I have to. However, if the deal is that they get less welfare for each dollar they can earn, that is good, and if someone trys to cheat the system, I take offense to that.


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## Grshppr (Dec 2, 2002)

I am not advocating it as well. On a normal year my guys won't even have to go on UI. We generally get more than enough snow to keep them on the payroll all winter. This winter we have only had 3 snow falls vs a regular 12-13 by this time. They are on UI this winter and I only pay a bit of cash maybe $250 so far, to keep them a bit happier. Its definately not a regular practice for me, and I don't think this amount really cheating the system.


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## wyldman (Jan 18, 2001)

I know of a few other companies who pay their guys a "preset" amount for the winter off season.They take this amount,or a portion of it and pay it out to the employee,before he gets his temination papers for UI.It will increase the income tax they have to pay,but also increases the insurable earnings for UI,so they can collect more.Any remaining amount or overtime,bonuses,are paid when the employee returns in the spring.Kinda like an incentive to return too.Not sure of all the legalities of it,or if it will work in your area.


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## Mr_Roboto (Dec 21, 2002)

> _Originally posted by wyldman _
> *I know of a few other companies who pay their guys a "preset" amount for the winter off season.They take this amount,or a portion of it and pay it out to the employee,before he gets his temination papers for UI.It will increase the income tax they have to pay,but also increases the insurable earnings for UI,so they can collect more.Any remaining amount or overtime,bonuses,are paid when the employee returns in the spring.Kinda like an incentive to return too.Not sure of all the legalities of it,or if it will work in your area. *


It's called time banking. Of course, it's illegal. Just another way to cheat unemployment compensation. But I can't judge, I may have forgot to report a little income while on unemployment, but I certainly wasn't getting rich. But like they say, if you play, be willing to pay.


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## PDQ Pete (Dec 22, 2002)

I work construction and in the winter we sign up when its to cold to work then on days its warm enough to work are boss will hold are hours they call it banking your hours. They let us bank up to a 100 hours, once back to work when we miss days because of rain or cold we use are bank hours to make 40 hours for the week Works out nice then you dont have to keep signing up every couple of weeks


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## CPSS (Mar 15, 2002)

Its still illegal Pete. We pay all our employees on the books. We are a professional business, and run it like one. If you have work for your employees they should not be on unemployment...period.


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## Arc Burn (Oct 21, 2002)

"if you have work for your employees,they should not be on unemployment...period"
Wait,back up...In New York you can work and draw UI if you report it properly weekly,I worked for a construction co. who slowed down in the winter,not completely but they couldn't give 40hrs/wk every week,i would work a day or two and draw the rest from UI.I realize you guys are talking cash out of pocket here,but that statement is not entirely true.


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## DanG (May 20, 2000)

I belive what Arc Burn said is true,

All i have are seasonal or part time employee's & what i do i is just pay them for the hours they work for me during the winter. 

My guys figure that the $ is good and it beats sitting at home doing nothing. 

Dan


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## CPSS (Mar 15, 2002)

Arc, I agree... what I was getting at was paying them cash and still letting them collect UI. The purpose of UI is to help you along till you can find a job. Paying any enployee " under the table " is illegal, and really hurts both employee and the employer. labor laws were set up to protect both.


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## seville009 (Sep 9, 2002)

In New York, if you, as the employee, incur a "substantial" reduction in hours of work, you are eligible for unemployment benefits. In that situation, the employee would still be working and collecting a paycheck from the employer, and also collecting benefits from the State.


It's important to understand for unemployment insurance tax purposes that someone doesn't have to be an employee in order to have payments to them be subject to unemployment taxes.

As an example, assume you're in the plowing business with three employees, and you get bogged down in a heavy storm and need to hire your neighbor who happens to have a plow, but does not have an established plowing business. Say that you pay in $100. That $100, while not subject to payroll taxes, is subject to unemployment taxes and you would be required to report that $100 on the quarterly NYS unemployment tax return.

A key factor to avoid this is to make sure that any sub contractor that you use gives you and invoice. That's different that giving you a receipt. I know, I know - if you're paying someone under the table, they're not going to give you and invoice or receipt. It's just a matter of how much protection that you want to provide to yourself.

Another point - don't think that if someone pays you cash for your services and you then pay your sub/employee cash that you won't get "caught" because you never recorded the cash that you received. If the entity that paid you the cash is audited and payments to you are discovered, that could trigger problems for you.


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## Mick (May 19, 2001)

In a related matter to what seville009 noted is Workman's Comp. If you pay the person cash, it does not relieve you of the need to pay in Workman's Compensation. In that example, where you hired someone to help you during a heavy period and that person got hurt, they would then have a legitimate claim to WC under your policy claiming that they understood they were your employee. If during an investigation, it is discovered that the person was being paid with unreported cash you will be subjected to heavy fines. It happened up here. My insurance agent told me about this one while she was working with it. A contractor who had a pretty big route in Augusta hired a person to help him plow out one driveway. He got hurt, filed a claim for WC claiming he assumed he was an employee, not a subcontractor. Not only did the contractor have a problem with WC, but with the insurance paying the damages. The contractor lost all his equipment, couldn't get his insurance renewed and went out of business.


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## seville009 (Sep 9, 2002)

Mick brings up a good point.

Basically is this just another way for you to "get caught".

Same issue is with unemployment. You pay someone under the table, then he/she files an unemployment claim and says that you were his employer. You're now screwed, as the burden is on you to prove that this person was not (if the person filed a truly false claim with the unemployment department, you can legitimately fight it, of course)


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## PDQ Pete (Dec 22, 2002)

CPSS you can have all kinds of work and still not be able to work because of the weather. Im a mason and we cant work outside to much below about 28, a lot depends on the weather. We dont receive any cash under the table There are about 16 employees in are company. Are company is vary professional. We are an all union company AND I TAKE A LOT OF PRIDE IN MY WORK. Pete


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## CPSS (Mar 15, 2002)

Pete, I still stand my ground. Its illegal. Do what you want its your business.


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## PDQ Pete (Dec 22, 2002)

CPSS I guess you never drove over the posted speed limit because that would be illegal. Ohio Paver was looking for ways to take care of his employees. I just made a suggestion. Pete


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## CPSS (Mar 15, 2002)

Pete I sure don't want to get into an argument with you here, but I think its important for people who don't know the laws to be aware of the seriousness. In NY your business can be shut down, the fines and penalties can take everything you've built up, and they can even put you in prison. I wanted to make sure some of the smaller or new guys understand the problems they face by taking a short cut. There's a big difference from " driving over the posted speed limit". Your comments make it sound like "everyones doing it", and I wanted to make it clear that the vast majority of business people are not paying under the table or banking hours. I didn't mean to insult you, and am sorry if I did.


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## ffshuter (Dec 5, 2002)

Hire off duty firefighters. As a firefighter I have been driving a plow part-time/on call for 14 years. You get a bunch of ffs that are on opposite shifts, that way you always have one available.


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## captbo (Feb 17, 2003)

IN Maryland it is best to set them up as independant contractors and pay them via a 1099, that makes them responsible for there own taxes,and you not reponsible for benifits, Capt. Bo


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