Cash in Hand

It refers to the financing package given for some work. It indicates the production and sale of goods or services, which are unregistered or hidden from the state, for some reason, but such transactions are legal in all respect.  

The reasons to opt for it comprise three conditions – evasion of direct/indirect taxes, and sometimes, it benefits fraud where the officially unemployed people are working while claiming unemployment benefits or avoiding labour legislation, insurance contributions, minimum wage agreements, and other standards at the workplace. 

Use of Cash in hand 

It can be found in many small firms. Some employment opportunities may involve such payments.

For example – if a person leaves the scheme of work within a week of joining and they are no longer eligible to get the employment benefits because of various factors like medical problems, the payoff received will be in the form of cash in hand.

The heterogeneity in such payments has not been recognized and is almost hidden from the economic paradigm of social relations and motives, almost equivalent to unpaid mutual aid.

• It covers the activities where the means do not comply with the regulations, but the ends are legitimate, like paying for somebody’s labour as a commodity.

• In the global economy, work like home working, cleaning, ironing, plumbing, bathroom installation, electrical repairs, gardening, car repairs or window cleaning jobs can be paid by cash.

• There has been a rise in self-employment in enterprise culture where employers subcontract production and use flexible production management systems.  

• Such methods are widely used to pay for services and goods and are also used in terms of interdependent employment activities. 

• Various studies try to understand the magnitude of such transactions cross-nationally, regionally, locally or in socio-economic groups. 

Some such transactions are organized by employers who informally undertake individual or autonomous services from self-employed people or a relative or friends. 

Today such payments are not considered low-paid or exploitative undertaken by a marginal group.

In modern economies, organized transactions can be found where informal employees are well-paid and have higher skills and control over their work and their relationship with the employer.

Some economists believe one cannot pay for certain commodities or services in cash. Structuring certain market-based models based on a fixed price and profit-making motivation is impossible. 

Studies find people may involve in work not just for money but for other motivations like developing a social network for global social investment funds or as an opportunity for reciprocity.