Latest trend: Working without pay

As Dave Barry would say, I am not making this up.

With nearly 14 million unemployed workers in America, many have gotten so desperate that they’re willing to work for free. While some businesses are wary of the legal risks and supervision such an arrangement might require, companies that have used free workers say it can pay off when done right.

“People who work for free are far hungrier than anybody who has a salary, so they’re going to outperform, they’re going to try to please, they’re going to be creative,” says Kelly Fallis, chief executive of Remote Stylist, a Toronto and New York-based startup that provides Web-based interior design services. “From a cost savings perspective, to get something off the ground, it’s huge. Especially if you’re a small business.”

In the last three years, Fallis has used about 50 unpaid interns for duties in marketing, editorial, advertising, sales, account management and public relations.  She’s convinced it’s the wave of the future in human resources. “Ten years from now, this is going to be the norm,” she says. … …

Believe it or not, the competition for some unpaid gigs can grow intense. John Lovejoy, managing director of multimedia fundraising company Nomadic Nation, received 300 responses for an editor position and 700 cameraman applications after only one week of advertising a project to drive from Germany to Cambodia in plastic cars. Not only were the positions unpaid, but successful candidates had to pay their own expenses.

One editor and two cameramen ended up quitting before the end of the trek due to rough conditions and 16-hour workdays. In retrospect, Lovejoy says, “I would screen a little bit better and make sure they understood that this wasn’t a vacation.”

via Fortune Management.

Some of these employers may be violating state and federal law, the Fortune article says.  The U.S. Labor Department said it is stepping up enforcement of wages and hours laws.

The federal Fair Labor Standards Act requires employers to pay minimum wage and overtime pay to all employees except interns, trainees and independent contractors.  Under federal law, an internship must benefit the intern and must not displace an existing worker.  An independent contractor can’t be under the control of a single employer or dependent on a single firm.  The law exempts employers with revenues of under $500,000 a year unless they engage in interstate commerce.

There also are “volunteers” who work for the “non-profit” sector.  I have a friend, marginally employed with a patchwork of part-time jobs, who holds an unpaid volunteer position on a “non-profit” organization in the hope of bolstering his resume and eventually getting a paid job.  I put “non-profit” in quotes because non-profit organizations can be highly lucrative for those in the top executive positions.

Click on Unpaid jobs: The new normal? for the full Fortune article.

Click on The Unpaid Intern: Legal Or Not for a report by Steven Greenhouse in the New York Times.  Greenhouse is author of The Big Squeeze: Tough Times for the American Worker – an excellent book.

Volunteer workers make an important contribution to society, and an internship, paid or not, can be a valuable learning experience.  But the sharp increase in unpaid work reported in these two articles is something more than the desire to serve and the desire to learn.

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