10 Things to Think About Before Accepting a Job that Pays Off the Books
Our friends at nannyjobs.com have asked that we share this important topic with our blog post with our readers. According to nannyjobs.com, the majority of nanny employers pay their nannies off the books or under the table. This means that the employer is not withholding any taxes from his nanny’s paycheck and he’s not paying his share of payroll taxes either. This can have serious consequences for both the employer and the nanny because working off the books is illegal. Before you decide to accept a position that pays cash, here are 10 questions to ask yourself.
- Am I comfortable with not being able to collect unemployment if I’m fired? If you’re fired from your job, do you have a large enough financial cushion to live on until you find a new position? One of the things your employer skips when he pays you cash is paying into the unemployment insurance system. Since your employer hasn’t been paying into the system, you won’t be able to collect benefits if you lose your job. So before you give up this benefit, think about how you’ll meet your financial obligations if you don’t have unemployment coming in.
- Am I comfortable with not being able to collect Worker’s Compensation if I’m hurt on the job? If you’re hurt while working a cash job, you won’t have the protection that Worker’s Compensation provides you. You’ll have to rely on your private health insurance. However, if they find out you were hurt on the job, in most cases they won’t cover the injury. What if you’re like a lot of nannies and don’t have health insurance? Then the costs of the injury fall directly on you to pay. Of course, you can ask your employer to cover them for you, but there’s no guarantee he will.
- How will not being able to prove my income affect me? If you’re trying to build your credit rating, qualify for a home or car loan or rent an apartment, accepting a cash job can work against you. Unless you’re paying taxes and filing a yearly tax return, you won’t be able to prove your income. This means the loan officer or the apartment manager won’t be able to offer you the loan or lease.
- Am I comfortable not saving for retirement through Social Security? If you’re in a cash only job, neither you nor your employer is contributing to your Social Security retirement account. Remember the amount of your retirement benefit is based on the amount you contributed over the years. So unless you’re doing a super job of saving for retirement on your own, you could find yourself at retirement age with no real means to retire.
- Can I afford to miss out on disability benefits? Did you know that if you’re unable to work, you may qualify for short or long term disability? The amount of your benefit is figured in part by your contribution to your Social Security account. However, if you’re paid in cash, those contributions don’t get made. This means that the disability benefit you’d otherwise be entitled to won’t be available to you.
- Will I still fight for my legal protections if that means admitting my part in avoiding taxes? If your employer fails to pay you according to labor laws, will you fight for what is owed you? If you’re being paid in cash, fighting for what you’re entitled to means you have to admit that you were being paid illegally.
- Does being paid under the table make me feel less professional? For many nannies, part of being professional is being paid legally. Before you take a cash job, think carefully about how being paid under the table will make you feel about yourself and your job.
- Am I comfortable lying to the IRS? When you’re paid under the table, you’re unable to report your income to the IRS. In essence, you have to lie to the federal government and claim that you’re not working at all. For many nannies, this forced deceitfulness isn’t worth a cash job.
- Will my employers take me less seriously because I’m paid like a babysitter? If your employers don’t pay you like a real household employee, will they see you as one? Or will they see you like the Saturday night babysitter who expects cash at the end of the evening? How your employer views you affects your whole employment relationship.
- Do I want to risk having to pay back taxes, fines, penalties and interest? Before you accept a cash job, think about what will happen if you’re caught. Are you in a position to pay the hefty amount you’ll owe the IRS? Do you want to be on their radar for the foreseeable future?