Prineville, OR asked in Employment Law and Business Law for Oregon

Q: How much trouble can a non government business get in trouble for paying a 13 year old under the table

They also lie about products being new and sealed

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1 Lawyer Answer
Calvin A. Knickerbocker III
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Answered
  • Beaverton, OR
  • Licensed in Oregon

A: Paying a 13-year-old under the table involves several legal and ethical issues, primarily centered around labor laws, tax evasion, and child labor regulations:

In the U.S., the Fair Labor Standards Act (FLSA) sets strict guidelines on when, for how long, and under what conditions minors can work. A 13-year-old typically can only work in very limited capacities, like in the entertainment industry with special permits, or in very light, non-hazardous jobs outside of school hours. Paying them under the table bypasses these regulations, which could lead to severe penalties for the employer.

Tax Evasion and Payroll Tax Violations:

Paying under the table means not reporting income, which is a form of tax evasion. This not only affects federal, state, and local taxes but also Social Security and Medicare contributions. The IRS has been known to impose hefty fines and even criminal charges for such practices. For instance, if caught, the business could face penalties of up to 100% of the tax evaded, plus interest, and potentially criminal prosecution.

Legal Penalties:

Fines for child labor violations can range significantly. For instance, a business might face fines for each violation, which could escalate if multiple violations or repeat offenses are found. The Department of Labor has the authority to enforce these laws, and while fines are common, severe cases might lead to criminal charges, especially if the work environment was hazardous or if there's evidence of exploitation.

Civil and Criminal Liability:

Being caught in such practices can devastate a business's reputation, leading to loss of customer trust, difficulty in attracting employees, and potential boycotts.

Enforcement and Detection:

Consequences could range from fines (which might seem like a cost of doing business for some but can be substantial) to criminal charges, especially if there's evidence of willful violation or harm to the minor. The exact trouble a business might face would depend on the jurisdiction, the specifics of the case (like the nature of work, hours worked, and any harm caused), and whether it's a first-time offense or part of a pattern.

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