Tuesday, April 28, 2009

The Latest on Mortimer

I'd been wondering lately what Mortimer was up to. Since being laid off at the end of February, he'd only managed to go on one interview. I tried to hook him up with a job at my company that would have been perfect, but the position ended up being down-graded and they thought he was overqualified and didn't even interview him beyond an introductory phone call with an HR person. In our last couple of emails, he was being a little evasive about whether he had any more job leads and I was starting to worry that he was in total denial about his situation.

But we had dinner last night, and the good news is that he's been working for about a week! The bad news is that it's a temporary project... and he's being paid under the table. This is totally dicey, of course. He's still collecting unemployment, but the weekly payment is particularly low in New York, so this extra money really helps. He just had to renew his lease, which meant his rent went up by about $100, to $1,250, I think. His health insurance is about $250 a month-- weirdly, it's now less than it cost him when he was employed, thanks to the COBRA changes that were part of the stimulus package.

It's interesting to see these government policies at work in a way that directly affects someone I'm close to-- sometimes it's too easy to see government spending as this big waste that just goes straight into the hands of corrupt administrators or the stereotypical welfare cheat who's sitting around watching TV while the checks roll in. On the one hand, what Mortimer's doing isn't exactly ethical-- he's definitely gaming the system. But on the other hand, he wants to work and has been trying to find a job. He found a situation where someone could afford to pay him for a little while, but knowing the future of it was uncertain, they wanted him to be able to keep collecting unemployment benefits (I think he is getting even less than the maximum of $430 per week). If Mortimer gets the chance to take a real full-time job, he'll happily do it, so I can't really blame him for what he's doing to make ends meet in the meantime. (FYI, of the 30 other people who were laid off with Mortimer, he said only 6 have found jobs.)

Have you ever been paid under the table? Would you do what Mortimer's doing?

12 comments:

Anonymous said...

what seems the most sketchy to me is that the company/person paying him is choosing to do so under the table...it less like they are doing Mortimer a favor and more doing themselves a favor by not having to pay unemployment insurance on him and then letting him go...

sketchy indeed, but I would do it.

Anonymous said...

I've never been paid under the table, but I would if that was the only way I could make ends meet. Why is he not getting the maximum amt. of unemployment?
Best of luck to him.
-Tasha

Anonymous said...

How did his rent go up ~8.7%? Rents are down considerably across the city. At worst he should have been able to negotiate to flat with last year.

SaveBuyLive said...

I haven't been paid under the table but if it's a temporary project I'd be tempted.

When you're unemployed or low on cash you do whatever you can to bring in a few bucks.

Anonymous said...

It appears that not paying taxes is the stylish thing to do. Think about all the government muckety-mucks who haven't paid taxes and are still in the cabinet! Why collect taxes when you can simply print more money? Tongue firmly planted in cheek :)

On a serious note, I;m not sure where I come down on getting paid under the table. On one hand, your friend would probably not have to pay any income taxes on it at all since his income is quite low right now. On the other, he needs the money and apparently the employer doesn't want the hassle.

jim said...

I've been paid under the table and I have no qualms about it, you gotta do what you gotta do. Sure it's not "right" to get paid under the table but desperate times call for desperate measures.

Anonymous said...

My internal sense of fairness is too strong for me to help my employer dodge taxes while simultaneously collecting benefits from taxpayers.

I would certainly declare all my earning to the IRS and pay my share of income taxes on any under-the-table earnings.

mOOm said...

When I was claiming unemployment in the UK back in 1989 I did some work one day a week at a street market. Unemployment pay in the UK is far less generous than in the US in dollar terms (but can last much longer). Here in Australia I haven't claimed because my assets are much too high to qualify (and the amount is similarly low like the UK).

Tally Girl said...

I never have, but of course I would if that was all I could find. When push comes to shove the moral high ground disappears and you do what is required of you to support yourself and family.

bugbear said...

I've only been on unemployment once, but as I recall any money you make while on unemployment either reduces the amount of your check by the same amount or, potentially, can kick you off unemployment altogether.

I happen to think that the practical thing in this case if you don't have a good cash cushion is to do the "unethical" thing and take the under the table money money and not report it.

There is little flexibility in the system to understand "individual cases" and also you have been paying taxes your entire life and will soon be doing it again, so I don't see a small amount of under the table cash for a short while (as opposed to as a lifestyle) as being a cardinal sin.

As an aside, I do report all of my side income as income when I am fully employed, and would not consider hiding it.

bugbear said...

I thought I would add that if it were me, I would most likely keep a record of that income and report it on my tax return as independent contractor income if and when I became fully employed again and could reasonably afford to pay the tax.

bugbear said...

@ "My internal sense of fairness is too strong for me to help my employer dodge taxes while simultaneously collecting benefits from taxpayers.
"

The tax is owed whether the employer withholds it or not. So in that case, you could just report the income later on (after you became fully employed again and had sufficient income) as self-employment income and you will pay the self-employment tax, including social security and medicare, and the government gets all the cash it is owed--just later than it would have if it had been wittheld by the employer. Problem solved, at least from your individual perspective.