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  1. #1
    Join Date
    Jul 2006
    Posts
    2

    Default Legal Issues Where Employees Are Paid Partially In Cash

    Hi,

    I have a question. I terminated an employee because she was dishonest and unethical. I paid her half cash and half check; however because I forgot to change the signing sheet, I forgot she also get the check. I actually overpaid her for five month equaling $1400. I finally found out in the fifth month and confronted her. She reluctantly pay me back $400 hundred dollars but refused to pay the rest of the months saying it was my problem, not hers.

    I terminated her and refused to pay her the seven days worth of pay. She cried foul and said she never received that much money from me, but everyone saw her counting the money each time.

    She had her son-in-law called me and threated a law suit saying that I cannot withhold his mother-in-law money and that I can be sent to jail. When I mentioned that his mother-in-law is also commiting a crime by accepting cash and social socurity, he said that she's not a U.S Citizen; so therefore, she cannot be in trouble.

    So my question is what is my penalty for paying my employees half cash? Can I lose my business license and possibly even jail time? Also, do I have the right to deduct her pay because I overpaid her last time? I have a signing log with her signature everytime she was paid.

    And what is the penalty for my former employee? Can she be deported back to her country and lose all her social benefits?

    Thank you for your time. Oh, by the way, I live in California.

  2. #2
    Join Date
    Jul 2006
    Posts
    985

    Default Re: employee terminated because of dishonesty

    So you are admitting to conducting fraudulent business practices, and victimizing persons because of their age or national origin and then you fire her for being unethical? We don't aid and abet criminals, you best go retain a criminal defense attorney.

  3. #3
    Join Date
    Jul 2006
    Posts
    2

    Default Re: employee terminated because of dishonesty

    Quote Quoting rmet4nzkx
    So you are admitting to conducting fraudulent business practices, and victimizing persons because of their age or national origin and then you fire her for being unethical? We don't aid and abet criminals, you best go retain a criminal defense attorney.

    How am I victimizing person because of thieir age or national origin? For one, she and I are of the same origin. Second, she ask to me to pay her in cash because she wanted the social security she was getting. I may be wrong in that I paid that employee half cash but to say I victimize her is not true. If you read correctly I said I actually overpaid her $1400 and she refused to pay me back.

    If I am being unethical so is she.

  4. #4
    Join Date
    Nov 2005
    Posts
    310

    Default Re: employee terminated because of dishonesty

    As far as I know, if you overpaid your employee it is on you. The extra money is a gift. While you may not like that this ex-employee took extra money from you, but it is not misconduct or cause to be fired. You may be sued for wrongful termination.

    And if you were paying this ex-employee cash under the table, you could be subjected to a payroll audit by the IRS or state.

    It's quite interesting that you criticize this ex-employee for accepting unreported money, but it is YOU that is helping her do it and cheating on your payroll taxes as well. You are no better than she is!!!! Maybe worse!!! And all because your internal controls failed, or more likely, you failed to put adequite internal controls to catch this sort of thing.

    You could go back and amend your payroll returns to reflect this ex-employees actual pay, and pay the interest and penalties that will likely come with it, but you will have to hope that this ex-employee doesn't realize that she can sue you for wrongful termination and the money she returned to you.

  5. #5
    Join Date
    Nov 2005
    Posts
    310

    Default Re: employee terminated because of dishonesty

    Quote Quoting chaos
    If I am being unethical so is she.
    When you BOTH agree to cheat the system, for your individual profit or benefit, you're damn right you're being unethical!!! Good to see you're starting to wake up!!!

  6. #6
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    71,834

    Default Re: employee terminated because of dishonesty

    Am I missing something here, because to me this looks like more than an ethics issue. What trouble can you get into if she, say, reports you to the state for payroll violations, and to the state and federal tax authorities for tax fraud? (You cheat on withholding taxes, and they will expect you to come up with the money you owe, plus interest and penalties, regardless of what you paid under the table.) And you suggest she's an undocumented worker on top of everything else? Last I checked it was also a crime to knowingly employ undocumented workers. Add to that, if you're engaged in this type of conduct with one employee, you're probably engaged in this type of conduct with others, and probably over the long-term.

    So sure, push her to the wall and see what happens.

  7. #7
    Join Date
    Jul 2006
    Posts
    985

    Default Re: Employee terminated because of dishonesty

    Doctrine of unclean hands, check it out.

  8. #8
    Join Date
    Jun 2006
    Location
    Practicing in Los Angeles, California
    Posts
    411

    Default Re: Employee terminated because of dishonesty

    Quote Quoting rmet4nzkx
    Doctrine of unclean hands, check it out.
    My response:

    Wouldn't it be funny if our writer said he was in the soap manufacturing business?

    IAAL

    P.S. Do you really believe that our writer would know, or understand, the Unclean Hands doctrine?

  9. #9
    Join Date
    Jul 2006
    Posts
    985

    Default Re: Employee terminated because of dishonesty

    Quote Quoting IAAL
    My response:

    Wouldn't it be funny if our writer said he was in the soap manufacturing business?

    IAAL

    P.S. Do you really believe that our writer would know, or understand, the Unclean Hands doctrine?
    Then OP would be up to his neck in Lye!
    Wouldn't that make for a very messy sweat shop? $1400 for 50% of 5 months labor, that is slave wages. Well if they are both from another culture OP is likely to receive a visit from the male relatives and that will be worse than the IRS and EEOC combined.

    I dont't think owning a soap factory would provide enough soap to absolve him of his "unclean hands" let alone understand the doctrine.

    Speaking of doctrines, Who wrote the Monroe Doctrine?

  10. #10
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,625

    Default Re: Employee terminated because of dishonesty

    Norma Jean Baker?

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