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[stupid question]: Is there any way for a salaried employee to volunteer/not be paid?

Company X is hiring exempt Employee A to replace an outgoing sillydood06/07/18
Who do you represent? There are two potentially aggreived jackofspeed06/07/18
I represent Company X. And yes, we're also worried about sillydood06/07/18
Wage law is state (and sometimes municipality) specific. jackofspeed06/07/18
Thank you, very helpful. If Company X and Employee A are in sillydood06/07/18
Yikes! So potential diversity jurisdiction when Company Y s jackofspeed06/07/18
Thank you. I advised we offer to hire him as a PT employee, sillydood06/07/18
On what basis is the employee exempt? An employee "engaged i onehell06/08/18
sillydood (Jun 7, 2018 - 1:46 pm)

Company X is hiring exempt Employee A to replace an outgoing exempt employee in the same role.

Employee A still works at Company Y and has a contract with Company Y so he can't start at Company X for a few months.

Can Employee A use time off from Company Y, and volunteer to work on an unpaid basis for Company X? This would be part-time, unpaid work until Employee A leaves Company Y and joins Company X.

Assume Employee A does not qualify as an unpaid intern.

Assume Employee A is doing normal employee work for Company X, given access to company equipment, etc.

Does it matter if Employee A is a high-level executive role?

Is there any way for Employee A to voluntarily waive/release claims for wages in this situation? Or is Company X on the hook for unpaid wages and penalties?

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jackofspeed (Jun 7, 2018 - 1:54 pm)

Who do you represent?

There are two potentially aggreived paries here: Company Y (violation of the duty of loyalty and potential misuse of company secrets and resources), and Employee A (who would be "working" without pay, potential bonus time, seniority, vacation time accrual etc.)

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sillydood (Jun 7, 2018 - 1:57 pm)

I represent Company X.

And yes, we're also worried about Employee A's potential violation of duty of loyalty and misuse of company time/assets, mainly for the potential PR fallout on my client. But our primary legal concern is whether there's any way around wage/employment laws here.

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jackofspeed (Jun 7, 2018 - 2:10 pm)

Wage law is state (and sometimes municipality) specific.

That said, it sounds very risky. If you hire X he has the whole SL period to file his wage and hour suit, and if you try to can him you'll be in the hook for wages, penalties, and he'd have a good shot at common law remedies too.

If it's a closely held Corp can he be given equity?

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sillydood (Jun 7, 2018 - 2:13 pm)

Thank you, very helpful. If Company X and Employee A are in two different states, which state labor law applies?

No ability for equity.

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jackofspeed (Jun 7, 2018 - 2:21 pm)

Yikes! So potential diversity jurisdiction when Company Y sues you and Employee X?

The only clean way out is to buy out his contract. Otherwise X needs to complete the terms of his "garden leave."

Anyway, you'd have to comply with both states wage-and-hour laws, giving X the benefit of the more generous of the two.

Explain to your client that either way you're eventually going to have to pay X for the work he does for you. Either now, or later after the department of labor is breathing down your neck.

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sillydood (Jun 7, 2018 - 2:28 pm)

Thank you. I advised we offer to hire him as a PT employee, and if he's not willing/able to do to, wait until his official start date.

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onehell (Jun 8, 2018 - 12:54 pm)

On what basis is the employee exempt? An employee "engaged in the practice of law or medicine" and teachers can work for free, but almost any other basis for FLSA exemption requires a minimum salary of $455 per week. If they're not paid at least that, then they're not exempt. And if they're not exempt then they have to be paid at least the greater of the federal or applicable state/local minimum wage. So unless you meet the criteria for an internship (which is hard to do if the intern isn't getting school credit for their work), it's effectively illegal to work for a for-profit company for free unless you're working as a doctor, lawyer or teacher.

And no, an employee can't waive minimum wage. It's true that as a practical matter enforcement is nearly nonexistent if the employee does not complain, but obviously you cannot ethically advise a client to break the law no matter how likely it may be that they would get away with it.

As to the guy's employment contract, if there is no noncompete, and it's just that the employee is not supposed to work for someone else while on leave, I would think that's none of your business. You're not a party to that agreement. A noncompete issue could put you at risk for tortious interference and intellectual property issues, but I don't see what a noncompete issue would have to do with his leave or with what you pay him, as such provisions always apply for a certain amount of time and geographic scope after the employee leaves the company entirely. What's enforceable depends on the facts and what the jurisdiction regards as reasonable in terms of time and scope, but they don't relate to leave policies and they aren't contingent on whether the person gets paid or not.

In short, you generally can't volunteer for a for-profit company, but an employee's compliance with the leave policies of their former employer is between them and their former employer. Noncompetes are a much stickier wicket, but they don't have anything to do with leave or with paid vs. volunteer status.

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