Unreported employment

Unreported employment, colloquially called working under the table, nixers being paid cash-in-hand or moonlighting (in U.K. English), is employment not reported to the state. This is often done by the employer or the employee for tax evasion or circumvention and non-compliance with other laws. Unreported employment is a part of what has been called the underground economy or non-observed economy.

Workers and employers who engage in this practice generally make and receive payments in cash, and the employer often does not check the employee's background or credentials, as is sometimes required by law or otherwise expected by the industry's client base, such as a license or professional certification. While the hiring of the employee may or may not be legal in itself, it is often done when the employer or the employee is intentionally failing to obey one or more laws.

In developed nations, unreported employment circumvents withholding tax and is part of the informal sector. This is hidden from the state for tax, social security or labour law purposes but is legal in all other aspects.

Common types of jobs that are paid cash-in-hand include:

Reasons one may work or pay a worker cash-in-hand include:

Unreported employment can have harmful effects on a government, and can negatively impact employers and employees. Unreported employment directly affects the government's ability to fund resources (government spending) by creating a tax gap. This refers to the loss of tax revenue a government makes due to unreported income.

A 2005 University of California, Los Angeles study showed that a then-particularly weak economy in the U.S. state of California was the result of more than two million workers who were receiving their pay off the books without paying taxes.

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