I agree that nothing will happen unless you get caught, but couldn’t a value be assigned to free golf? In other words, average of 5 rounds of golf per week, retail price $25=wages of $125.
So for that 6 hours (125/6) I would have been “compensated” $10 and change per hour, so not in violation of minimum wage laws? Or must it be paid in currency?
And all applicable taxes paid on the employees “income”? Sure.
Plus social security (or in Canada, CPP and UIC deductions of about 5% or 6% overall) . Plus any applicable increase in Workers’ Compensation for additional employees, plus they presumably collect sales tax on the green fees…
Nobody’s going to quibble about an occasional free round of golf for doing a favour, but if you turn it into a full-time job, someone could get their shorts in a knot.
Modern society is not set up to ignore barter or allow side deals that ignore minimum wage. Unfortunately, nasty people have proved themselves adept at exploiting loopholes.
For example, I remember one lady telling me about her job as a teenager at Shoppers Drug Mart (“Shoppers Slave Mart” she called it) where the owner fired and then rehired everyone every few months. Until they plugged that loophole, you did not have to pay a vacation pay to anyone who worked less than 6 months.
You still hear stories about slave labour and exploitation. One member of parliament here a few years ago was accused of exploiting a foreign guest worker, holding her passport and making her work long hours without pay taking care of the whining mother, threatening deportation. what happens to illegal immigrants who basically cannot complain is far worse.
For reasons like this, most Labour Standards departments have very limited sympathy for any reason or excuse or game to try to get around minimum wage requirements.
I understand all of that and appreciate the info, but I was just trying to stay within the narrow confines of the thread which is about the minimum wage.
Could the golf course have been accused on not paying me the minimum wage, even though they paid me with something of equivalent (or greater) value?
What you’re asking about is in-kind compensation. And I don’t think anybody’s addressed it definitively – because we don’t know the answer. But I expect that even if in-kind compensation was legal in this situation, the vaule of it would have to rise to the minimum wage at least. (And there’d be an issue of how you calculate the value – whether it’s the cost to the employer or the market value they’d charge to the paying public, or something else. I don’t know the answer to that one either.)
–Cliffy
In-kind compensation is legitimate for wages. I know that there are some specific limits (many of which vary from state to state) about some types of in-kind compensation like food, but there’s no general reason an employee can’t take their wages in trade.
As others have pointed out, in kind wages must still be reported and are subject to payroll tax. Because you can’t pay or withhold payroll taxes in kind (just try sending the IRS a pizza or free round of golf), the company would have to pay the government in cash for the FICA/unemployment/worker’s comp/etc. like they would for any other employee.
In reality, any company/employee dedicated to doing the exchange right would rather just pay in cash and have the employee buy their own pizza or golf in a separate transaction.
There was an interesting tax court case about a company paying in gold coins. They reported as wages only the face value of the coins, not the actual value of the gold. (Say, a $20 gold coin that was worth $25 for the gold). When the IRS brought charges, the court agreed with the IRS: compensation was based on value received, not just cash.
So, the golf course did pay minimum wage (assuming the value of the free golf was high enough). There’s no issue there. However, I’d be surprised if the golf course was paying the taxes and issuing a W-2. They could be held liable for taxes, penalty and interest for failure to report and pay all of the tax.
Regarding interns: There is an exception to minimum wage for them. If an intern is getting college credit by working for you, you are not required to pay them.
Exactly - if the golf course side-stepped the minimum-wage issue by arguing equal value, there’s still all the deductions and reporting that did not happen. (Some courses are pretty expensive. Minimum wage for a day might cover a round.)
There was a NYT article about the government (New York state?) cracking down on for-profit companies recently if they had no-pay internships. The suggestion was that internship was becoming a threat - “If you don’t take our for-free grunt job for several months, we will not consider you when an opening occurs”. Plus it’s discriminatory. Some students cannot afford to go without pay for months, while others can live off rich mommy and daddy. It mentioned the rules, something like if they were doing something that was of value to the company, then minimum wage laws applied. Some companies the internship is a joke where they are lowly coffee fetchers with no choice to talk back if they want a good recommendation when they graduate…