Payments are generally 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.
In developed nations, unreported employment evades withholding tax and is part of the informal sector.
They have tools that aid in assessing unreported taxes, which can result in large fines or jail time for the employer.
The complexity of employment regulations and large amount of paperwork can be daunting, especially when someone is needed for only a few hours a week.
The amounts are too small for tax collecting agencies to pursue and the paperwork too arduous to file and so legitimate micro-employment among businesses is rare.
In professional fields like architecture, or marketing, unreported work is typically the first step to starting a legitimate business.
Again, paperwork, compliance, and knowledge of labor laws are prohibitive for the small amount of work that is performed.
Those who are unlikely to find employment through the reported economy, including those with past criminal records or current warrants as well as illegal immigrants can be reasonably productive and self-sufficient.
A teenager hired to aid in constructing a shed or barn, for example, learns valuable skills and responsibility.
Youth-run lemonade stands that have been shut down by police for example have received an enormous amount of bad press and public outcry.
In the United States, authorities have focused enforcement resources on large-scale operations like undocumented immigrants who are employed by large companies.
According to a New York Times report in February 2013, the Obama administration had demonstrated a new strategy to curb the employment of undocumented immigrants by focusing on companies that hire them in the first place.