Is it legal for me to work for less than minimum wage (or without pay) if I agree to do so, for an evaluation period, agreed upon beforehand, the reason being to reduce the perceived risk for the person who “hires” me for a position?
For example, last summer, I put up an ad on Craigslist for SAT Math tutoring for $20/hour, and someone called me up and I earned about $500, and I was wondering if I was asked for $3.00/hour, and got the job at that wage, my “employer” would be violating federal/state labor laws?
This summer, I was thinking about putting up an ad on Craigslist as an unpaid consultant for some number of hours (a “trial” period); after that I was thinking about charging $20/hour or so. I’m not doing it specifically to make a living, as I’ve saved up enough to take some time off and try new things, and want to see if I’d like consulting, but I want to make sure I’m not breaking a law.
You wouldn’t be violating any law no matter how little you were paid. Your employer could be in trouble depending on what you’re doing. As a contractor, you don’t have to be paid by the hour, and can charge as little as you like. You can also be a paid a stipend for short term or part time jobs that might otherwise be voluntary. But as a contractor, you can charge whatever you like. Some details about the type of job might be helpful here. But in most cases this is not a good idea. You’re more likely to find a little bit of work from someone who just wants to take advantage of the low price without any intention of continued employment.
I don’t think you can possibly break any law by working for below minimum wage - but depending on circumstances your employer certainly can, and I think any sensible employer disinclined to later being sued etc. would be unlikely to hire you unless they know the work falls into some exempt category.
Working for less than minimum wage isn’t illegal. Paying someone less than minimum wage can violate FLSA as well as other regulations enacted and overviewed by the Federal DOL and its Wage & Hour division and equivalent State-level departments in all 50 states. But even that is situational.
Technically one of the exceptions for regular employers and employees and the minimum wage is during a “training period.” There are certain criteria you have to meet but technically you can pay someone legally under minimum wage during a training period.
A 1099 contractor doesn’t have an employer, he has customers. He can charge his customers whatever he wants. The only time this would run afoul of labor laws would be if you were an employee. If you have to follow employer norms like showing up for work with a set schedule, and the employer expects you to follow workplace attendance policies, and especially (and this can override other things) if your employer has W2 employees doing the exact same job you’re doing with the exact same scheduling rules then the IRS may actually consider you an employee regardless of what agreement you have with your customer/employer. In that case your employer can get in trouble with the IRS for things like not paying the employer share of FICA along with other things that they violate by calling a W2 employee a 1099 contractor.
This is not true. Professionals (and there’s a pretty strict federal definition and many states with even more strict rules of their own) can be exempt from overtime, but not from minimum wage. I won’t derail the thread too far, but my wife worked for a school… given our state law and the job duties, I encouraged her to join a lawsuit charging that the majority of employees were not exempt and were owed thousands of dollars of unpaid overtime, but she didn’t want to rock the boat.
Need some general advice…on a phone call I received about an hour after I posted the ad (at 10:30 pm for that matter…). The ad said that I was doing strategy consulting for $40/hour with an interim period of no pay of either a week after the first session or a total of 8 session hours, which I described as a 100% risk free, no obligation trial period.
The person who called asked what kind of strategy consulting I did, and I said what I meant by “strategy,” and proceeded to give a general description of what services I was offering, whereupon he asked: “would that include business plans?” I replied: “Strategy in the context of how to achieve/execute the business plan in an established small to medium business or enterprise.” Then, he said thank you and we ended the call.
Do you think it’s reasonable to infer from this conversation that the person who called me, given that he asked if “strategy consulting” services I was offering were related to “business plans,” was interested in consulting for a business that he hadn’t yet got up and running?
I was a little surprised to receive the call, and I would actually like to consult a pre-start up business even more than an established business, but I didn’t think that someone at that stage would be seeking consulting services (for some reason that I assumed subconsciously…I wish I said “of course,” that’s exactly what I mean/am doing!!). Do you think, given what I’ve said here, that the person wanted consulting regarding the strategy pertaining to a business plan of a company he was thinking of starting, rather than strategy in the sense of executing the business plan or further exploring its opportunities in an already “established” (this was the word I used…) business, and if I called him back telling him that I would be interested in doing strategy consulting also in the context of a business plan of a company that was just at an idea stage or pre-startup, there’s a chance something might happen here? (I did offer to work for free for a week…)
Thanx. Or is the person going to think I’m a loser who can’t even explain my job description, and laugh? =)
I have a friend* that does this all the time. He claims this is the best - You get highly motivated people at an extremely cheap wage that work extremely hard to impress you. He is especially proud of getting recent college grads or grads during summer interns to work for free for 3-6 months.
An expression I picked up while teaching (where you are expected to work for free on many things and be happy about it and receive no thanks for it because that is what teachers are supposed to do)…was “If it’s worth doing, it’s worth doing for money”
There may be exceptions to that saying but that is what they are…exceptions. They are not the norm.
*Yes, he is still a friend despite being an immoral jackass
Supery00n, the best time to get business consulting, especially strategy-wise, is before a business starts. I can’t tell you how many people jump in with no idea of what they’re doing. (Especially restaurants. Why do people think that eating at restaurants qualifies them to run one?) People need to put their plans together, obtain financing, acquire the right talent and equipment, etc. and all of that depends on their strategy. It’s a slightly different ball game than consulting for an existing business, where you’re probably used to starting off by studying how things are in that business. If you’re going to put hundreds of thousands of dollars into starting the business, putting a couple thousand into consulting to make sure the rest is spent correctly just makes sense.