In the world of household employment, it can be tempting to accept a job that pays in cash with no payroll or income tax reporting. If you’ve been working in a position that has paid you cash, consider your raise and review time to springboard into a discussion about legal payroll and pre-tax benefits. Here’s why getting on the books is in everyone’s best interest.
Unemployment
Caregiving jobs are usually not permanent positions. Whether you’re a nanny and the children grow up and go to school, or the level of care needed for an elderly person change significantly, your position will eventually end. This is where short-term unemployment benefits are invaluable. Whether it’s planned or unplanned, unemployment benefits help bridge the gap, providing income while looking for your next position. If your previous job has paid you only cash wages, it can prolong the process of obtaining unemployment benefits and force you to make an uncomfortable decision about outing the family who paid you under the table.
Social Security and Medicare
Someday you will want to retire and will need income for that chapter of your life. If you did not pay into the Social Security system as a legal employee during your working years, you will generally not qualify for these benefits. To qualify for Social Security benefits, you must pay into the system for 40 calendar quarters. Your benefit amount is also determined by your past wages, so you want to make sure your full wages are being reported.
Workers Compensation
Caregivers can experience injuries at work that require medical attention. If the injury is significant, the bills can become unmanageable, or your physical limitations could keep you out of work for a while. If you are being paid legally, your employer can get worker’s compensation insurance, which covers your medical bills and lost wages in the event of an on-the-job injury. If you are being paid under the table and you suffer an injury, your only other options would be relying on your employer to pick up the tab willingly, or to sue your employer. These options could be cost prohibitive and stressful.
To ensure you are protected, insist on a detailed written work agreement that outlines your legal pay. It is important to ensure both you and your employer are within compliance. Unsure of where you should start regarding legal pay? Contact our experienced team at HomeWork Solutions at 1-800-626-4829 or info@homeworksolutions.com.