The Filutowski Law Firm, PLLC

The growing gaps in employment on resumes are inflicting panic.  Job seekers are no longer so keen on a earning wage, but rather have become desperate to just maintain marketable skills by working for free.

For those who have managed to side-step a lay-off so far, are instead being asked by their employers, like British Airways did for its workers, to take leave without pay.

For the unemployed willing to work for free, they reason that in exchange for having a sense of productivity during the day and sharpening skills, they may receive intangible benefits, such as a positive reference and shortened gap of unemployment on the resume.  However, these perks may be achieved at the risk of being exploited by the employer.

A Reuters article discusses how some unemployed workers are working at Jobnob.com for no money.  Jobnob matches unemployed skilled workers with start-up businesses that cannot afford to pay a wage.  Jobnob’s motto: “work with a startup for traditional or alternative compensation.”

While volunteers, as we know, work for free for non-profits, this is not commonplace for for-profit companies.  For-profits must hire employees lawfully by paying at least a minimum wage pursuant to the Fair Labor Standards Act (FLSA).

FLSA covers employees that work for businesses or organizations ( “enterprises”) that have at least two employees and:
(1) have an annual sales of $500,000 or

(2) are a hospital, business providing medical or nursing care for residents, school, preschool, or government agency.

So, if you find yourself working for Microsoft for free, that’s a problem for Microsoft.
If an employer has less than two employees, it still may be required to pay a minimum wage under FLSA if it engages in “commerce or in the production of goods for commerce.”  For example an employee who:

1. produces of goods that will be sent out of state (e.g., assembly line worker or a secretary typing letters in an office);
2. regularly makes out-of-state telephone calls;
3. handles interstate transaction records;
4. travel to other states for work;
5. does janitorial work in buildings where goods are produced for shipment outside the State;
6. provides domestic services (e.g., housekeepers, full-time babysitters, and cooks); etc.

However, whether or not an employee-employer relationship exists is a gray area that has been debated by the nation’s highest court.   The U.S. Supreme Court acknowledges that there is no hard-and-fast to determine such a relationship, but rather each case must be determined on its own facts.  The Court provided a range of varying factors surrounding an individual’s contributions to the “employer” to help determine whether an employment relationship exists.  The factors assess the relationship from an “economic reality” rather than “technical concepts.”  The factors include, but are not limited to:

1) The extent to which the services rendered by the individual are an integral part of the “employer’s” business.

2) The permanency of the relationship.

3) The amount of the individual’s investment in facilities and equipment.

4) The nature and degree of control by the “employer.”

5) The individual’s opportunities for profit and loss.

6) The amount of independent initiative, judgment, or foresight in open market competition with others required for the success of the individual.

7) The degree of independent business organization and operation.

If have further questions about FLSA’s applicability to your situation, you may find FLSA’s online Advisor helpful.