California Employment Law
California Employment Law Questions Answered by Legal Experts
Good morning Angela,I'm Doug, and I'm very sorry to hear of your situation. My goal is to provide you with excellent service today.Unfortunately, as the employee was not doing a job that could be classified as an independent contractor.But the fact of the matter is that it is not illegal to pay an employee in cash. What you will have to do is insure that you withhold and pay to the state and feds the appropriate amount of withholdings. And presuming that you haven't had any need to send in your federal tax deposits and state deposits yet, then this employee really can't do much to get you in trouble. Be sure to add them to the workers compensation policy and pay their unemployment. Also, prepare a payroll "stub" for the employee showing the money you "withheld" for payroll taxes as the law requires.The demand that you pay the 20K or the employee is going to try and report you for allegedly committing a crime is a felony In CA.Under CA Penal Code, Extortion is a crime:§518. Extortion is the obtaining of property from another, with his consent, or the obtaining of an official act of a public officer, induced by a wrongful use of force or fear, or under color of official right. §519. Fear, such as will constitute extortion, may be induced by a threat, either: 1. To do an unlawful injury to the person or property of the individual threatened or of a third person; or, 2. To accuse the individual threatened, or any relative of his, or member of his family, of any crime; or, 3. To expose, or to impute to him or them any deformity, disgrace or crime; or, 4. To expose any secret affecting him or them.§520. Every person who extorts any money or other property from another, under circumstances not amounting to robbery or carjacking, by means of force, or any threat, such as is mentioned in Section 519, shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 for two, three or four years. Offer him the W-4 to fill out---tell him that you have already withheld taxes based on his claiming one, and will refund the remainder (which would be just a few dollars) if he claims more.As for getting the final pay to him, Count him as claiming only himself, pay him with a payroll check with a proper payroll stub on it and tell him that you are filing a felony extortion report with the police against him. That should shut him up.Under CA law, he has committed another crime in CA by recording the conversations without the permission of all people in the discussion, in advance of the recording being made. He can be criminally prosecuted by the state for that as well. And the argument can be made that because the recording was illegal, it may not be used as evidence.The reality is that the IRS and the state are not going to have a problem with this one insignificant lapse with this employee---so long as your business is not doing this on a regular basis. The 2 weeks this guy worked for you is easily handled and the fact that you are in between bookkeepers is a valid reason for being behind.You may reply back to me again, using the Reply to Expert link, if you have additional questions.I wish you the best in your future,Doug
Thank you thank you thank you!!! You were so very helpful and I feel like you just took the weight of the world off my shoulders. I have one more question. Part of his threat was that I call him personally by 10am this morning. I am assuming he will record this conversation, and it is the 1st time I have had any interaction with this person. What should I limit the conversation too? Do you recommend I record it as well but make a statement about the recording at the beginning of the phone call? This guy is just a lunatic so I want to cover all my bases. And once again THANK YOU!
Perfect. One more thing. I am planning on sending the following e-mail to this employee:
Since you have not filled out a W-4 yet please fill out the attached and scan and email the attached copy by tomorrow so we can get your final pay to you. With this final pay we will also include a paystub which will show that we have already withheld taxes based on you claiming one, and we will refund the remainder if you claim more for the prior pay period.
With the return of this W-4 please let me know where you whether you would like to pick up your final paycheck or have it mailed.
Your cooperation is much appreciated and I would like to avoid filing a felony extortion report with the police.
Is this e-mail better coming from me as the owner or should I have my manager send it since she has had contact with him?
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).