by: Brooke Allen with Adrienne Rodney

This article is about working for free and a follow-on piece will discuss educating yourself at minimal cost.

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Q. Are there laws that prevent you from working for free?

A. NO. You are not breaking any law if you work without compensation. It is a free country, after all.

However, there are laws against an employer hiring you for less than the minimum wage. During hard times, even unpaid internships have become harder to land, not only because there is competition from unemployed people with loads of experience, but also because the government has been cracking down on some of these programs as abusive.

You can find loads of opportunity to work for free in exchange for contacts, experience, and references, but first you need to understand the law.

Internships

Why are unpaid internships so hard to get, with some people paying as much as $8,000 to a broker to land one? (See the New York Times article: Unpaid Work, but They Pay for Privilege.) The answer lies in the law.

An employer may legally take on trainees without paying them (often called “interns”), however the United States Department of Labor (DOL) has issued a six-part test to determine if someone qualifies for an exemption to minimum wage laws. Among other things, the training must not be for the immediate benefit of the employer but rather primarily for the benefit of the trainee who must work under close supervision, and must not displace a regular employee.1

The DOL and state authorities have recently been cracking down on internship programs that do not meet these standards. Their goal is not to prevent people from getting experience, but rather to keep abusive employers from exploiting workers. In normal times, a firm might have an internship program so as to train a pool of candidates from which they might hire in the future. But some cash strapped firms without the budget to hire anyone, whether trained or not, are trying to exploit a dire job market by getting free labor out of “interns.” Such activity violates both the spirit and the letter of the law.

This does not mean that you cannot gain valuable experience by offering your labor for free. However, you do not want to wait around for someone to design an internship for you, but rather you want to take the initiative.

Self-Employment

The minimum wage laws do not apply to the self-employed. And a self-employed person can give away free samples of his or her work.

Consider this hypothetical scenario: Susie’s first job after graduating from college was as a bookkeeper. Unfortunately, it lasted only seven weeks before her employer folded.

After months of traditional job hunting, she decided to offer her services pro-bono to struggling small businesses, as her schedule permitted. She approached 27 firms and five took her up on her offer. After two months, one of those companies made a full-time job offer, and she had to stop helping the other four.

Even though Susie did work for the benefit of the five firms, and she was not in a training program, this sort of arrangement can be perfectly legal. The reason is because, in this scenario, Susie is most likely viewed as self-employed, and as such, not subject to the minimum wage laws. Just like lawyers, doctors, accountants, and even electricians, Susie may give away her labor pro-bono, and recipients are free to accept her offer. Professionals often do this to gain experience, break into a new market, or even just to be good-hearted in helping the needy. And these days, plenty of cash strapped businesses are in need.

While the DOL doesn’t care what the self-employed pay themselves or charge others, the Internal Revenue Service (IRS) has something to say about whether you are in fact independent or an employee. One reason they care is that many firms have been trying to reclassify employees as contractors so as to avoid paying benefits. But the self-employed people do not have income tax withheld, and many succumb to temptation and don’t pay their full share. So the IRS.would much rather have as many people as possible deemed employees subject to withholding.

The IRS has a “twenty factor test” they to help determine if you are someone’s employee or truly independent. Many of the factors that would qualify Susie as an independent would disqualify her as an intern. For example, to be independent you should not be closely supervised or receive training. The IRS would consider the fact that Susie worked only part-time for multiple companies, and controlled her hours as evidence she was independent. Because she wasn’t being paid, no income would be eligible to be reclassified as subject to withholding anyway.

Lawyers and Human Resource Experts Chime In

Greg Szymanski is the H. R. director for a large home-builder in the Pacific Northwest. Like many people in his profession, he is worried about risks. When we asked about take our daughters and sons to work day, he said, “To be honest, we don’t do it.” Because his operation runs the gamut from low-risk office work to high-risk construction sites, they decided to prohibit bringing any children into the workplace. He said, “Unfortunately, so much of what I do is contrary to my personal beliefs because we’re constantly worried about the potential downside. In my world, all I get is bad news. Nobody ever calls up and says, ‘I’m really glad I work here and thank you very much; I love my job.’”

However, Greg is very supportive of pro-active job candidates who go the extra mile. He told us a story about how they needed to fill a senior management position, and while all the other candidates looked good on paper, only one visited a few of their construction sites even before the first interview. He presented five things he suggested they change, whether they hired him or not. They did hire him because he was the only candidate who began doing the job before they hired him to do it.

Oscar Michelen is a litigator with CuomoLLC representing many small and mid-sized businesses on wage and hour issues, and he is an adjunct professor at New York Law School. He explains that the DOL six part test is just a guideline for the courts to use in determining if a trainee is subject to minimum wage laws. “As long as the employee is the predominant person who is gaining a benefit, it does not mean that you, as an employer, cannot also benefit. You don’t have to be Mother Teresa; you can obtain a benefit.”

We proposed to him a hypothetical situation in which a college student who approaches a firm offering to attempt a viral marketing campaign to be done simply to gain experience. Oscar confirmed that the firm is not in much risk of running afoul of the DOL guidelines since such project is clearly not exploitative. “The government is not looking to stop that,” he said, “Some employers are being over cautious. I’ve told many of my own clients to relax, since you can comply with the law and have interns. There’s no camera in your place of business. Yes, you can bring your nephews who go to college to work in your office for free; of course you can.”

Michael Helfand, founder of http://www.findgreatlawyers.com, describes himself as a lawyer who believes in speaking bluntly and in plain English. He says that if he were a worker he would not worry if an employer were violating the Fair Labor Standards Act. “Take a neighborhood bakery for example,” he says, “You’ve always wanted to be a pastry chef, and the Michael Jordan of pastry chefs is there in your city, and you find out he’s there every day at 4 in the morning. And you say, ‘Look, I want to learn from you, I’ll be here everyday at 4 AM, I’ll do whatever you tell me to do and you won’t have to pay me.’ Do you think that guy is thinking about the FLSA if he takes you on? It’s more of, ‘You know, I’m really impressed by this kid,’ or ‘I can really use the help.’”

He says that the pastry chef has little to worry about in such an arrangement. “The reality is it’s not going to be policed at small business levels, and the only way you’re going to get in trouble is if the person you hire for the internship reports you. And even then our government is so overworked that the odds of the DOL investigating some small firm are minimal. If you get caught it’s not like you’re going to get shut down; you may have to pay a fine or something.”

For Helfand, ethics trumps legality. Kids in college drink before they’re 21, and there are only minor legal and no ethical problems with that. However, cheating on a test might not be illegal, but it is most certainly unethical. Likewise, in the above example, had you asked the pastry chef to teach you what he knows and then complain to the DOL that you weren’t being paid, you might be within your legal rights, but would you be ethical?

Helfand doesn’t want you to obsess about the law. He wants you to do the right thing.

Questions to ask yourself.

Who is in charge? If you are your own, in spirit and in fact, then nobody can tell you that you cannot give away free samples of your work. Some of the most effective people see themselves as their own boss, even when they have a job that comes with a boss, and they are always giving away free work, not only to friends and relatives, but also by doing more than they are paid to do on the job. These are the people who are often first hired and last fired during a recession.

But if you want someone else to be the boss then the law says you must be paid the minimum wage. Working without pay for a boss (other than yourself) puts that person in a precarious position – the goal must be to help you, not themselves, or they may run afoul of the law. This is a lot to ask for.

How do you define “exploitation?” If you think that to be of use to another person without being paid is to be exploited, then, for heaven’s sake, don’t do it. If you think that you must do this because you have no choice, then you’ll see yourself as a victim of circumstances beyond your control. And that is a recipe for depression. While you’re at it, reflect on what is involved in raising a child, or doing homework for a teacher.

What’s in it for you? Most people who become bitter when volunteering to help others lose sight of (or never saw) what is in it for them. Ideally, you should end every day feeling that the ledger is balanced. Even if you didn’t get a fair day’s pay for your work, you were treated fairly, and you got something just as valuable in terms of skill, experience, contacts, pleasure, self-esteem, or whatever. If you only see your work today as a hardship that might pay dividends in the future, there is a good chance that you’ll be disappointed. But if every day’s work stands on its own merit, any good that comes of it in the future is just gravy.

What’s in it for the other guy? The main reason people won’t want to give you work to do, even without pay, is because they think that managing the process will be more trouble than it is worth. You can’t expect a warm response to, “Tell me what to do, and show me how to do it, and maybe I’ll do it or maybe I won’t.” Yet this is the attitude most people take, even if they aren’t honest enough to say so. And, if they don’t deliver, they say, “You have no right to complain; you weren’t paying me.” That is BS. Any person who has reason to believe they can rely on you has reason to complain if you don’t come through.

SUMMARY: If you are willing to exchange free labor for experience, don’t just wait around for someone to design a program for you. Instead, view yourself as self-employed and find people you can help with free samples of your work. Most of these people would never have thought of offering an internship – but you are not asking for one. You are exercising your right to be of help to others.



1 The six criteria are: 1) The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in vocational school. 2) The training is primarily for the benefit of the intern, not the employer, 3) The intern works under close supervision and does not displace any regular employees. 4) The intern is not entitled to a job at the conclusion of the training period, and 6) The employer and the intern understand that the intern shall not be entitled to wages for the time spent training.

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