Social Comment by Madame Zucco - The Free Gig

< Madame Zucco is a young lady who will be writing articles for Financial Margin of Safety.She will be commenting on society's trends and fashions. Like Guido, Madame Zucco is a pseudonym. >

This year's college grads are suppose to have had a rough time of it, job wise. Or so the mainstream media says.

However, there are plenty of jobs out there under the right conditions. That's basically because they have so much trouble finding suckers, oops, I mean potential "employees" to fill the positions.

It's what I call the Free Gig.

The Free Gig works like this. You're young, just getting your first adult job. < Or rather, trying to get your first adult job. > You go apply for a  job opening,  to what you think is a reputable employer. They tell you sure, they have just the position for you. It's an "internship". When you ask how much it pays, their reply is - "Pay? There's no pay. No compensation. You work for us until we determine you're qualified. You're an intern. We'll be training you. Certainly you don't expect us to pay you for this."

Well whether or not you expect it,  US Federal Labor Law and most states mandate that you be paid if you meet the laws' definition of  an employee. And that you be paid at least the minimum hourly wage.

But you're not an employee, Mr. Employer says. You're only an independent contractor. What and how we pay you is what our agreement is. Our "contract". Usually this "contract" is verbal, and when payday comes, Mr. "lovely" Employer suddenly forgets what they promised.

However all this is irrelevant. If you are working under this firms' supervision and using their facilities, you are classified under the law as an employee, with the full rights, benefits, and protection the law says you are entitled to have. It doesn't matter what some dip manager says you are.

Maybe, you think, this occurs  only in some small, sleazy operation run by crooks. Well, you'd be wrong. Many large banks have operated this way. So have multinationals and corporations of all sizes. Even one large American telephone utility, where Guido had to represent one of these de facto employees.

In other words, it's everywhere and it's rampant.

Guido says it has never ceased to  amaze him,  just how stupid these large corporations can be. These dummies actually think they can get away with claiming someone. is an independent contractor. They have no idea of the liability exposure that exists - both,  for example,  in potential workmen comp claims and potential Fica Taxes owed < if grossly negligent, they owe both the employee's and employer's share >.

So how do they get away with it?  Easy, the Federal and state employees,  who have the responsibility enforcing  these laws, are both too stupid and too lazy to do anything.

And as long as that's the case, the Free Gig will continue.

< Sorry, my lovable Guido, no quotes today. >