As any small business owner knows, getting a new company off the ground requires a lot of work. And for those entrepreneurs not enamored with the idea of running their company as a one-person show, hiring employees is among the first steps along the way to actually making it happen.
Unfortunately, many of the same startups burdened with so much work also suffer from a limited supply of funds in their early days, meaning they can find it tough to afford the number of employees they need.
But with the ranks of unemployed in the United States hovering at its highest rate in more than two decades, some small firms have found a rather unusual solution to this dilemma – people willing to work for free. Employment agencies such as Jobnob.com and PeopleConnect have done their part in connecting unemployed individuals willing to work without payment to small firms in need of a helping hand.
But hiring individuals to work for free, even for a few hours a week, could land your firm in legal hot water.
According to FindLaw, an online provider of legal information, the Fair Labor Standards Act states that minimum wage must be paid to employees at all businesses that have $500,000 or more in annual sales. While that seems to rule out some smaller companies, here are a few further guidelines from FindLaw on the finer points of the law to consider: