Paid in Cash? Proving Your Average Weekly Wage to Get Benefits
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Paid in Cash? Proving Your Average Weekly Wage to Get Benefits

Minnesota law allows employers to pay employees their wages in cash. However, this law may cause employees major problems as they try to recover wage loss benefits after workplace injuries.

Employers may take advantage of the cash wage payments to underreport employees’ average weekly wages on the First Report of Injury form. Even with other forms of payment, employers misreport employees’ wages. This can result in employees receiving much lower wage loss benefits than they should and having trouble paying the bills as a result.

If you are an employee in this situation, you may need to attend a hearing with your lawyer to explain to a workers’ compensation judge why your wage loss benefits should increase. Alternatively, your lawyer may be able to resolve the issue with the workers’ compensation insurance company. You will need to gather evidence to prove your true average weekly wage at the hearing or to the insurer. This evidence might include:

  • Your bank statements showing regular deposits of your cash wages
  • Your employer’s bank statements showing cash withdrawals
  • Receipts or wage statements provided by your employer
  • Income tax returns (yours or your employers) showing wages and withholding
  • Live testimony

Unfortunately, many employers who pay in cash cover their tracks – they may fail to withhold taxes, fail to properly report to the IRS, or fail to issue wage statements to employees. Further, an employer who pays in cash and learns of a workplace injury may take steps to hide the true amount the injured employee was paid. Safeguard yourself against this possibility by keeping your own records of the cash you receive each payday.

In addition, some employers pay casual employees, part-time employees, or supposed independent contractors in cash. This helps the employers pay lower taxes and avoid spending money on workers’ compensation insurance. Also, many of these employers have misclassified their contractors, who are truly employees. In Minnesota, all employers of at least one employee (even part-time) must have workers’ comp insurance. If you are facing problems with your employer when you try to report a workplace injury, contact a Minnesota lawyer today.

Need help getting workers’ compensation for your injury? Joe Osterbauer, Esq. and the Osterbauer Law Firm stand up for injured Minnesota workers’ rights. Joe’s 27 years of workers’ compensation experience and his team’s speedy service combine to get clients the results they need. To schedule a free consultation, visit Osterbauer Law Firm online or call Joe’s office at (612) 334-3434.