One of the commonest reasons for this occurring so frequently is because it saves the employer money. As in most countries around the world, a business owner has to pay a considerable amount of money to get the correct permits in order to employ a foreigner worker. Some countries demand an extra monthly payment from the employer (in 2014 approximately $100 USD per month in Indonesia, for example) because they are employing someone who is not local and thereby potentially preventing a local person from taking that same position. Getting the paperwork right under such circumstances is expensive and time-consuming.
In some countries in Latin America, such as Argentina, getting the necessary paperwork can take more than six months and be terrifyingly expensive. Business want to make money, and they have students wishing to start English classes. The potential teacher who handed in his CV may not have a TEFL certificate. It’s a difficult situation for them to operate in.
Needless to say, if language school owners are able to avoid all this extra hassle, then some will take advantage of the situation. This is seen regularly in countries with corruption issues because should the language centre be caught employing a teacher illegally, they will in some cases simply have to hand over some cash as a way of saying sorry. Whether this is a fine or a bribe is very much open to interpretation.
As for the teacher, it could go either way. He or she could be ignored entirely and free to continue as before as long as his or her employer continues handing over brown envelopes. Alternatively, he or she could be asked to pay a fine of some sort, or simply given a couple of days to leave the country. It can depend on the government official who is investigating. In countries where corruption is not so ingrained, legal action or deportation is most likely. He or she may be unable to return to the country for a fixed number of years following on from this.
The likelihood of being stopped and having your paperwork checked varies from country to country too. It is quite possible to live and work illegally for years and years and never be questioned about the legality of your employment or self-employment. This is especially the case if you are working in Europe as a freelance one-to-one tutor. Then again, there could be a raid on expatriates the month that you arrive. It is impossible to predict and therefore rather worrying if you do not have the proper work visa or tax form.
There is also a moral issue. Are you happy living in a country yet not contributing any income taxes? That is for you to decide. In some countries in the Middle East such as Saudi Arabia and the United Arab Emirates you would not be paying any tax on your legally-earned income anyway, but that region is the last area on Earth where you be advised to work illegally. As you may be aware, penalties are especially harsh in the Middle East.
Teachers who are employed illegally are unlikely to have a contract of employment and therefore only limited legal rights. If the language centre wishes to sack the teacher, it can be done in an instant. This situation is fine for those teachers who are travelling through several countries, teaching for a month or two in one place before moving on to another. But if you are looking for job security and a genuine career in English language tuition then this is quite a dodgy scenario to be in.
The best language centres and schools will always provide their staff with the necessary visa documents. If a school is interested in hiring you but is vague about whether or not they will sponsor you to stay in the country as a foreign worker (in countries where this is appropriate) then it is a good idea to wait until you are offered a clear sign by way of a written contract stating they they will pay for all your permits.
Do bear in mind, however, that even in the better language centres it is sometimes necessary to begin working on, for example, a Tourist Visa, whilst your paperwork is being processed. The legalities of this vary from country to country and can change from one month to the next.
Some Tourist Visas last 30 days whereas others last 90 days. It depends on the country in question and your own nationality. The most annoying thing is when you are still waiting for the official documents to come through after 29 days and have only one day left on your visa. This often means travelling out to a neighbouring country and re-entering the first country again on a second Tourist Visa. Note that not all nations allow you to re-enter without a break of a certain number of days. Be sure to check the relevant Embassy website for the most up-to-date information on this.
If you are working on a Tourist Visa or in some other ‘less than 100% legal’ manner then you will be paid in cash. But without a contract, can you really trust the word of your employer about exactly when you will be getting paid each month? What if he or she refuses to pay you, or finds an excuse? In most countries, there is little you can do because if you asked for any help from relevant authorities you yourself could get into trouble too.
None of the benefits that you might normally ask for as part of an official contract of employment such as payment for airfares or medical insurance money are likely to be offered to you. If you get ill, you would be in a rather difficult situation unless you have plenty of savings in a readily accessible bank account.
So, it would appear that the negatives outweigh the benefits of working without the proper paperwork in all cases except the wandering backpacker scenario. Those schools that will not offer a proper contract at all are best avoided unless you are merely travelling through as a backpacker and are happy to head on to the next city the following day or week.
Above all, ask yourself more than once whether or not you have genuine confidence in the company offering you this new job.