Can I Be Paid In Cash?

1. Is It Legal to Pay Employees in Cash?

Yes, but ONLY IF it goes through official payroll.

Paying an employee in cash is legally permissible only if the employer satisfies all standard payroll requirements:

• Itemized Pay Stub: The employer must issue a statement showing total hours worked, gross pay, hourly rate, and itemized deductions.

• Mandatory Tax Withholdings: The employer must withhold federal and state income taxes, Social Security (FICA), and Medicare taxes, and match FICA/Medicare contributions.

• Payroll Records (29 C.F.R. § 516.2): The cash payment must be recorded in the official general ledger, payroll journal, and reported on state/federal quarterly tax returns and annual W-2 forms.

2. Off-the-Books "Desk Drawer" Cash Payments Are Illegal

Handing an employee physical cash directly out of a desk drawer or petty cash box without a formal pay stub or tax withholdings—such as the ~$46 cash payment given to Katie Oldham by CEO Heather Crews after removing hours from her timecard[cite: 6, 11]—violates multiple state and federal statutes:

• Federal & State Tax Fraud: Paying off-the-books cash to settle worked hours avoids paying employer payroll taxes (FICA/unemployment) and fails to withhold employee taxes.

• FLSA Recordkeeping Violations (29 U.S.C. § 211(c)): The Fair Labor Standards Act strictly requires employers to maintain complete, unaltered records of all compensation paid for worked hours.

• Wage Theft & Timecard Alteration Cover-Ups: Using unrecorded cash to settle missing hours off-the-books is frequently treated by labor auditors as evidence of intentional, willful wage theft, used to conceal unauthorized timesheet edits or avoid reporting overtime.

3. Documented Impact

In corporate and Medicaid compliance audits, documented off-the-books cash transactions for altered shift hours (such as those detailed in the statements of Katie Oldham and Natalie Gittings) serve as evidence of willful non-compliance under the FLSA. Willful violations extend the statutory recovery period for back wages to 3 years and trigger mandatory liquidated (double) damages and federal payroll audits.