@daisy, You are right, you came in late and do not have the benefit of reading what was written by the OP. If you had, you would know that it was very clear that the under the table wages were not what the IRS allows. Further discussion confirmed that.
Yes, I suppose there was a bit of a monkey pile and I have some responsibility for it. In the past three years I have seen my unemployment rates and work comp rise despite never having a work comp claim in 13 years and no unemployment expenses charged to my account in more than 10 years. Why? Because both systems operate on a basis where the amounts paid in have to cover current expenses. i.e. those who do not pay into the system raise the price for the rest of us. Unemployment costs have risen due to the economy, but it is those of us that did not go out of business and still employ people that have to pick up the tab. A business that is not contributing and, for all I know, paying cash wages to someone collecting benefits is taking money out of “my” pocket.
I am aware of the math regarding cash wages and yes, one can pay a slightly lower wage and save the other employment costs… even aside from the risk issues, it still does not make much sense mathematically unless you also have undeclared revenue to pay with. In my work as a business broker and appraiser and with SCORE clients, I see cash wages pretty often and it is almost universally accompanied by undeclared revenue. It takes different forms, among the most common are: cash not rung up for carryout orders when the owner is alone in the place, catering sales not rung up, a second cash register during rushes not reported… you get the idea. When one uses undeclared revenue the math on cash wages works great.
Read through the thread again and filter out the annoyed response factor and you will find there is quite of bit of valid and helpful advice in it starting with the benefits of using a POS and the risks of paying cash wages. This board is an interesting place. I have not found anything else quite like it; there are a number of very experienced pros here who give good advice for free and we regularly see newbies coming in with some amazingly naive questions that are treated with consideration, questions answered, and resources pointed out. In this case, I think it was not so much the fact that the OP was paying cash wages as that the response given defended that practice as if it was some kind of right due to the tough economy that turned a criticism into a confrontation.
