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Cash under the table in Michigan?

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  • Cash under the table in Michigan?

    I am employed by a temporary agency in Michigan with the usual W-2, etc.

    The customer site where I work -- a call center -- also pays me cash in an envelope for selling products over the phone. There are no statements or apparent deductions from the cash payments for anything. And no sign that any of this is reported back to the temp agency.

    Should there be statements deductions from the cash? I have never been asked to sign a receipt for the cash.

    Do the direct cash payments make me a direct employee of the call center?

    Is this legal for me, the temporary agency, the call center? What are the reporting obligations?

  • #2
    You and the call centre are violating several laws.
    • you are violating tax laws if you don't pay income and other taxes on this money the call centre is giving you
    • the call centre is violating tax and employment laws in not deducting taxes etc. from the money it is giving you, and in not treating like an employee
    • the call centre is also probably violating contract law because it likely has a contractual agreement with the temp agency to not hire you

    The agency doesn't appear to be violating any laws here.


    • #3
      The call centre is also not paying their matching taxes on your FICA and Medicare tax, as well as unemployment tax, etc. and they are breaking the law.

      Yes, it does make you an employee of the call center.


      • #4
        you need to report it to the agency because it is possible they are paying that fee based on wages paid and underreporting there also.

        At minimum, you would need to track and report it as tips/untaxed income on your annual income tax and you will be liable for all taxes on it (both parts of FICA) and it won't count towards your unemployment wage based nor towards any benefits that are based on wages (401k deferrals, STD/LTD, etc)

        Honestly while extra cash might seem good to you, there are a lot of bad consequences.


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