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Don’t ask your employees to work for free
By Lauren | July 24, 2009
Continuing my Friday series on tips to keep your business out of court, let’s talk about a troubling practice that’s threatening to become a trend. Earlier this week, I appeared on Fox Radio to talk about employers who are asking employees to work for free. The most noted example is British Airways, which recently asked some of its U.K.-based staff to work for no salaries for up to a month to save the company money.
That might fly in Britain (no pun intended), but it would break the law here in the U.S., where federal and state laws prohibit commercial companies from withholding their employees’ pay. With unemployment at a twenty-year high, some unemployed workers view volunteering as an opportunity to polish their resumes and make new contacts. For the employer, however, taking advantage of a desperate individual’s willingness to “work” without pay is not only ethically questionable, it’s also an invitation to a very expensive lawsuit.
Most American companies are smart enough not to take on volunteer “employees” outright. But with the recession dragging on the bottom line, employers might be tempted to cut corners (for example, by asking workers to put in extra time without paying overtime, offering leave as a substitute for overtime pay, or exempting employees from overtime pay when they’re really eligible for it). That kind of penny-pinching is short-sighted at best. Wage and hour suits are one of the fastest growing areas of litigation in this country. It doesn’t take much to turn an employee into a plaintiff where pay issues are concerned.
The rules are a little different for academic internships and volunteer work at non-profit organizations (both of which, incidentally, can provide excellent opportunities for resume building). But for commercial companies hiring employees, it’s important to pay your people as promised. Make sure all of your jobs are properly classified as eligible for or exempt from overtime pay, then pay overtime when you should. Anything else is penny-wise but pound-foolish when it comes to keeping your company out of court.
Topics: Business Ethics, corporate responsibility, ethics |
July 29th, 2009 at 12:38 pm
Great post and it is true. I would like to take on this strategy.