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Welcome to Sisters In Law, news.com.au’s weekly column solving all of your legal problems. This week, our resident lawyers and real-life sisters Alison and Jillian Barrett from Maurice Blackburn talk about getting paid cash in hand and not through the books.
QUESTION: I work in a cafe as a waitress in my first job since leaving school. I got the job from a sign in the window and was super stoked when I landed the gig with no experience. I’ve been there two months and I’ve just realised that my boss pays me cash in hand and not through the books. My dad realised this when he asked what super fund I was with. He asked to see my pay slip and I said I’d never had one. My boss always just pays me cash which I thought was normal. What are my rights as a worker? I love my job and don’t want to leave but I want to pay tax and super. My boss says it’s OK and it’s “better for us both this way” but it makes me feel uncomfortable. Could I get into trouble for working illegally? What can I do to make sure my boss follows the rules? – Carly, 18, Victoria.
ANSWER:
It sounds like your boss is relying on cash in hand to dodge their legal obligations and stay off the radar of the Tax Office and Fair Work Australia.
This could mean you aren’t receiving the correct wages and entitlements, and it could also put you at risk of a hefty tax bill if your boss isn’t paying income tax on your behalf.
The Fair Work Act outlines minimum wages, conditions and awards across Australia.
Do some research to find out whether an award covers your role. If it does, check the Fair Work pay guide to see whether you are being paid correctly.
You will likely find you are being underpaid compared to the award rates, and potentially missing out on penalty rates and leave entitlements.
Breaching these conditions is unlawful and you may have rights to bring a claim against your boss.
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However, you should know that being paid cash doesn’t absolve you of your tax obligations.
At the end of the financial year you need to declare your earnings to the Australian Taxation Office (ATO) when you lodge a tax return. Tips from customers are also income and need to be declared.
Because your employer is not deducting tax from your wages, there is a risk that you could end up with a large tax bill.
If you don’t pay proper tax you are also exposing yourself to possible prosecution, fines and – in the most serious cases – even jail time.
If you receive any Centrelink benefits, you must declare all of your earnings (cash or otherwise) to Centrelink. Again, failing to do so can lead to a hefty refund and possible prosecution.
Regarding your superannuation, the ATO has some great online resources to help determine if you are entitled to be paid superannuation, and how much super you should have been paid.
You can also use the ATO website to report your boss for unpaid super and make a claim.
Even when receiving cash in hand, you should be covered for workers’ compensation insurance if you are injured at work.
A workers compensation claim would help to fund medical treatment needed because of the injury, but if you are seeking reimbursement for any time off work, it could be tricky to prove your earnings if you don’t have any pay slips.
It sounds like you have had a conversation with your boss about the cash payments which hasn’t gone anywhere so it is now time to put it in writing.
You should send your boss an email asking them to issue you with pay slips which outline the hours worked, hourly rates, tax deducted and superannuation paid.
In the email you should also ask your boss to issue you with a payment summary at the end of the financial year setting out your full earnings and tax deducted.
Finally, you should provide your bank details and ask for your wages to be deposited directly into your account. This way, even if you don’t get pay slips, you at least have a bank record of your earnings.
We acknowledge these are really tricky issues to speak up on, especially as you love your work and jobs can be hard to come by.
You should be aware that if you tell your boss you’re unhappy with the working conditions, and you lose your job, that could be grounds for an unfair dismissal claim.
If all of this fails, you should report your boss to the ATO and Fair Work and also seek legal advice. There are many community legal centres and services who can provide free advice if you can’t afford a lawyer.
This legal information is general in nature and should not be regarded as specific legal advice or relied upon. Persons requiring particular legal advice should consult a solicitor.
If you have a legal question you would like Alison and Jillian to answer, please email stories@news.com.au
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