What to do about pay stub misrepresentation?

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What to do about pay stub misrepresentation?

MY EMPLOYER IS REPORTING MY TIPS AS DRIVER MILEAGE REIMBURSEMENT ON MY PAY STUBS BUT THEY DO NOT PAY ME FOR MILEAGE REIMBURSEMENT.

Asked on February 7, 2011 under Employment Labor Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

What your employer is doing is tax fraud, since reimbursement is treated differently for tax purposes than tips, which, after all, are a form of income. Or, to be more charitable: if done knowingly, it's tax fraud, if done through a misunderstandinig, it's still a violation of the law, but is not fraud per se.

The key thing is, misreporting taxes could impose liability--e.g. fines, penalties, interest; potentially imprisonment, though that's usually not the case in smaller matters--on both you and the employer. You should first explain to the employer that you want the tips to be reported correctly, because you don't want to risk any liability by reporting income as reimbursement. If they refuse to correct that, you need to decide what to do; the legal course of action you would be expected to take is to report the matter to the IRS and/or local tax authorities.


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