Alright, so this one is throwing me for a loop on what to do.
I've got a friend who works in a small business doing sales (it's a collectibles shop in a mall) where the “employees” are paid in cash at the end of the week.
I have experience in business and payroll, and from what I understand they are doing a lot of things wrong.
- Calling people “employees” when they are not issued a W-2 or have taxes taken out for them is improper and can cause legal issues. These people are contractors.
- If contractors are designated work hours by a business, they are no longer contractors, they are employees and need to be issued a W-2 wage, with taxes being paid.
- Even if they are contractors, they need to get issued a 1099 for tax purposes at the end of the year.
This business not only treats my friend awful, they are breaking (what I believe to be) common rules for employment. These people are paid under the table, are called employees, are demanded to work specific schedules, and are not being issued the right legal papers to legitimize their income.
Here's my problem… I can't find anywhere in the Texas Workforce Commission site where I can report this AND I can't find on the IRS website where I can report this.
It's come to a point where I've warned the owner about this, and he has not attempted to change or correct the way he's treating people, or running his business, so I want to report it, for the sake of my friend.
Anyone have any better insight on what to do?