NYT: Low-Wage Workers Are Often Cheated, Study Says

[twa]

Admiring the large number of people who seem to think that mentioning the word "taxes" somehow justifies a business committing criminal acts in order to steal from their employees.

Businesses rarely justify anything,they react and adapt....or fail

A business is a amoral institution(especially corps),it is only the human factor that brings morals

[ChocolateCitySkin]

at no point did i defend it. lets look at it another way. lets say you have a worker that wants to work more hours. to put food on his table. but you can't give him pay and a half. but he wants to work those hours what do you do? are you a criminal if you let him work those hours at a regular wage?

you know what larry you're absolutely right. let's tax all small businesses out the nose because clearly there is no correlation between an increase in fixed expenses and the ability to pay employees.

[GhostofSparta]

Granted, I don't know about whatever your state and local income taxes are,

But I believe that FICA (SS and medicare) is 7.5% (of the first $100K. Zero after that.)

Checking my handy-dandy data from The Tax Foundation, in order for your income tax to be 18% of your paycheck (which is what it would take for your withholding to get to the minimum level you claim it is, of 25%), you'd have to be in the top 5% of income earners (but not in the top 1%). And in order to be in that group, you'd have to be earning at least $160K, after deductions and exclusions.

(Also observing that, if your income is that high, then FICA isn't taking 7% of your paycheck (because of the ceiling), so even then, you wouldn't be paying 25%.)

You must be one of the Evil Rich Capitalist Exploiters.

Edit:

I guarantee you that you have never paid taxes that high.

Ok, here's the numbers from my last paycheck at my minimum wage job:

Gross pay: $550.22

FICA: $38.02

MEDFICA: $8.90

FED WTH: $44.37

PA:$19.20

Total taxes/witheld: $110.49

So a $550 paycheck turns into $439.

So you're right, I grossly exaggerated. That's not 25% of my paycheck, that's only 20% of my paycheck that I don't get to see. That makes me feel sooooooooo much better.:doh:

[ChocolateCitySkin]

Ok, here's the numbers from my last paycheck at my minimum wage job:

Gross pay: $550.22

FICA: $38.02

MEDFICA: $8.90

FED WTH: $44.37

PA:$19.20

Total taxes/witheld: $110.49

So a $550 paycheck turns into $439.

So you're right, I grossly exaggerated. That's not 25% of my paycheck, that's only 20% of my paycheck that I don't get to see. That makes me feel sooooooooo much better.:doh:

you think thats bad plz someone post a breakdown of MD withholdings.

[Larry]

at no point did i defend it.

Yes, you did. And still are.

The subject of the thread is that is's common for businesses to illegally steal from their employees.

Your response: "It's them evil taxes. If the government just eliminated taxes (on some people), then those people would turn around and voluntarily give that money to the people they're currently stealing from".

lets look at it another way. lets say you have a worker that wants to work more hours. to put food on his table. but you can't give him pay and a half. but he wants to work those hours what do you do? are you a criminal if you let him work those hours at a regular wage?

Hmmm. Let's see. What does the law say?

(Also admiring the way the imaginary scenario involves a worker begging for the chance to work illegally, as opposed to the employer demanding it.)

you know what larry you're absolutely right. let's tax all small businesses out the nose because clearly there is no correlation between an increase in fixed expenses and the ability to pay employees.

You know, CCS, you're right. Let's just pull things out of our hineys, because clearly there's no correlation between what's actually been said, and the things that you'll claim.

Again: What has changed, in terms of taxes, that allows you to claim that taxes are the reason that businesses stealing from their employees appears (according to this study, which I have questions about) to have become a standard part of doing business?

You (and, I think, several others) made the claim that this behavior is because of taxes. I'm asking for somebody to please at least attempt to back up the claim they've made. Show me some kind of correlation where, when Tax X went up, the number of businesses demanding that employees work overtime for free went up.

[GhostofSparta]

you think thats bad plz someone post a breakdown of MD withholdings.

Oh don't worry, I lived in MD for all but the last year of my life, and worked from 16-23 there, and MD is where I pulled the 25% minimum from. I don't miss that bite being taken from my paycheck.

[twa]

Show me some kind of correlation where, when Tax X went up, the number of businesses demanding that employees work overtime for free went up.

But that would be illegal;)

[ChocolateCitySkin]

hahahaha you think that was a scenario i dreamed up?

wonder how many general contractors, roofers, house painters, landscapers, day laborers would agree.

[ChocolateCitySkin]

additionally i said taxes are a fixed cost... if your gross sales are substantially lower due to the economic landscape businesses can't stop paying their taxes. they can however find people that are willing to work for less.

[Larry]

Ok, here's the numbers from my last paycheck at my minimum wage job:

Gross pay: $550.22

FICA: $38.02

MEDFICA: $8.90

FED WTH: $44.37

PA:$19.20

Total taxes/witheld: $110.49

So a $550 paycheck turns into $439.

So you're right, I grossly exaggerated. That's not 25% of my paycheck, that's only 20% of my paycheck that I don't get to see. That makes me feel sooooooooo much better.:doh:

According to the IRS withholding tables posted here, in order to have $38 in FICA withheld, you had to make $613 on that paycheck.

In order to have $8.90 in Medicare withholding, you have to have made $613.

Federal withholding depends on some other things, like how long is the pay period and how many deductions did you claim. But if a single person, with no other deductions, makes $613 in a two-week pay period, then his withholding is $44.35. Two cents different from what you posted.

So, what's the difference? Did you receive $63 in tips this pay period? Maybe some other $63 that doesn't show up as "gross pay", but which is taxable income?

The math says that you didn't pay $110 on an income of 550. You paid $110 on an income of $613.

(And I do admit, I'm amazed at how much the state taxes were. Dunno if PA is just really high, or if it's been too long since I worked some place that had a state income tax. I didn't think there were any states that were half of the Federal tax.)

[GhostofSparta]

According to the IRS withholding tables posted here, in order to have $38 in FICA withheld, you had to make $613 on that paycheck.

In order to have $8.90 in Medicare withholding, you have to have made $613.

Federal withholding depends on some other things, like how long is the pay period and how many deductions did you claim. But if a single person, with no other deductions, makes $613 in a two-week pay period, then his withholding is $44.35. Two cents different from what you posted.

So, what's the difference? Did you receive $63 in tips this pay period? Maybe some other $63 that doesn't show up as "gross pay", but which is taxable income?

The math says that you didn't pay $110 on an income of 550. You paid $110 on an income of $613.

(And I do admit, I'm amazed at how much the state taxes were. Dunno if PA is just really high, or if it's been too long since I worked some place that had a state income tax. I didn't think there were any states that were half of the Federal tax.)

:whoknows: I really don't know what else to tell you. That's what I made. No tips, no extra pay, nothing. $550.22 exactly, and that's what was taken out (and no, I'm not scanning a paycheck with all that much personal info on it and posting it on the internet to "prove it").

2 week pay period, I'm married but pretty sure I only have 1 deduction claimed (always heard it's better to get screwed per paycheck and get some back than have them let me keep more and get screwed all at once). And yeah, PA state tax is rediculous, you'll get no argument from me.

[AsburySkinsFan]

Ok, here's the numbers from my last paycheck at my minimum wage job:

Gross pay: $550.22

FICA: $38.02

MEDFICA: $8.90

FED WTH: $44.37

PA:$19.20

Total taxes/witheld: $110.49

So a $550 paycheck turns into $439.

So you're right, I grossly exaggerated. That's not 25% of my paycheck, that's only 20% of my paycheck that I don't get to see. That makes me feel sooooooooo much better.:doh:

Until April, my guess is that you're witholding more than you are due to pay am I right? I know that when I worked a regular job (file self-employed now) I always held out more than I needed to pay because I didn't want to end up paying more on April 15th.

[JimboDaMan]

Unless I'm losing it, something's out of whack.

Those figures are for a biweekly paycheck, correct? According to my trusty Publication 15T (page 56), withholding for Federal income tax, social security, and Medicare combined for married, biweekly gross of $550 with 1 deduction should be $42.08. Basically at min wage you don't pay federal income tax, just FICA.

PA withholding is a flat 3.07%, which on $550 is $17.

So I get a total income tax (excluding local tax, if any) of $42+$17=$59, for a combined tax rate of just over 10%.

The discrepancy on FICA and PA is relatively small, around $7. But bux is bux, and esp the FICA amount should be closer to the mark - you won't be getting that money back. But the federal withholding in particular is a lot. Unless you're getting a refund in the $1100 range, this looks hinky.

Am I off base here? Or are we maybe proving the point that minimum wage workers are often cheated?

[Larry]

Yeah, that thought occurred to me to. (That his numbers may prove that his employer is cheating him.)

Now, your federal withholding depends on a lot of things, such as, how many deductions you chose to claim. A lot of lazy, dumb people (like myself) intentionally chose to claim fewer deductions than they're entitled to, just to avoid having to scrape up a (relatively) big check on April 15th.

But your FICA withholding is always 6.20% of your gross pay. (Unless you're making more than $108K/year. There's a ceiling.) Medicare is always 1.45%. (With no ceiling.)

Either your employer is calculating your withholding to allow for something which is taxable income, but isn't in your paycheck. (Like tips, where you get cash during the day. To the IRS, tips are income, so tips cause your withholding to go up, even though they don't cause your paycheck to go up, because you've already got the money.)

Or your employer is simply taking more money out of your paycheck than he's supposed to. (Which could be because he's stealing from you, or could simply mean that he doesn't know what he's doing.)

Now, like I said, there may be a legitimate reason for doing this, if there's some kind on benefit you're receiving that isn't pay, but which counts as income. (Contributions to a Roth? Dental coverage? Normally, these things are listed on your paycheck as pay, and a corresponding deduction, but there may be some reason why they aren't listed that way.)

But if it's just a case of him withholding too much, then that's a problem.

If he's withholding too much income tax, (either through stupidity or because you chose to have him do so), then you'll get the money back when you file your taxes.

But if he's withholding too much FICA or Medicare, than as far as I know, you're just losing that money. I don't think there is a procedure for getting back the money that shouldn't have been withheld in the first place.

(Although I'm not an expert. There are, on the long form 1040, blanks for you to say that too much Social Security was withheld, and to get it back as part of your tax refund. But I think that that blank only covers people who earned more than the SS "ceiling" of $108K. I don't think it covers people who's employers simply can't do math.)

We're not talking a lot of money, here. The FICA and Medicare mistakes, if they are mistakes, are costing you a bit less than $5 a week. (And if the other withholdings are wrong, then you'll get the money back when you file.)

But still, you might want to look into it.