Even though it is practice that occasionally occurs in the work place Your boss could run afoul of the IRS as well as the Pennsylvania Departments of Revenue because part of the money paid to you should be paid into withholding tax as well as Social Security (F.I.C.A. deduction). Additionally, if you fail to report the income received you could get into trouble with the same agencies.
Answer Applies to: Pennsylvania
Yes. It is illegal.
Answer Applies to: Mississippi
Your employer can be in big trouble with IRS is he is not withholding taxes and remitting them to IRS If you are accepting payments for wages, and not reporting your income to IRS, you are in trouble. Much deeper trouble.
Answer Applies to: Georgia
Yes, possibly. If you are an independent contractor it is not under the table. If you are an actual contractor you too will have issues and liability for taxes. Seek counsel before you act. Also, look for an above the table job.
Answer Applies to: Michigan