“Free” labor is readily available to employers in today’s economy.  This is especially so within the advertising, publishing and media fields.  Such “free” laborers are often called “interns”.  Unlike in years past however, many of them rather than being college students working for school credit, are people who have been fired/terminated/let go from jobs paying $100,000+, are often over 50 years old and are working for “free” in the hopes of getting re-hired in some capacity.  The very existence of these people is not acknowledged by the government nor in its mountain of statistics.

We have always urged our clients to either pay their interns a legal wage or execute a formal agreement with a reputable college or university wherein the intern is receiving some form of legitimate college credit in exchange for their labors. Nothing good can from any government agency coming to your door even if its just to “ask questions”.

Almost anyone who works for free will be taken advantage of by someone.  Even though the specter of children working in sweatshops in our major cities has largely disappeared, the 21st century has brought a new form of free labor and an entirely different class of victims. See this article in NY Magazine titled: The Interns Are Organizing! by Noreen Malone This is just the type of case we have been predicting would come down the pike. While we have no direct comment nor specific knowledge of the Hearst matter, we can comfortably state that we are privy to facts which lead us to predict many more cases will be brought by “interns” old enough to be the parents of the interns in the Hearst case.

As a result of labor abuses in the 19th and 20th centuries a myriad of laws evolved including but not limited to, child labor guidelines, minimum wage laws, OSHA safety requirements and of course Workers Compensation.   Certain states – New York in particular – have clamped down on businesses who do not maintain Worker’s Compensation insurance for their employees and “others”.  The failure to maintain such coverage can lead to big penalties.  This is quite ironic as the premiums to buy coverage are very low.  Many of you “employ” college interns, part timers and volunteers.  Each may serve as a ticking time bomb for your business.

So just how does this affect me, Al Franken, solo photographer?   For this we defer to Leslie Tilles, Esq. our legal expert on Workers Compensation.  She advises that the most common errors, myths and misconceptions held by photographers (and even some accountants) is that certain persons who receive 1099s, or don’t get paid, or students or part timers are not “employees” under the applicable state Workers Compensation laws and therefore a policy is not needed.  Lacking a policy and/or a mistake as to just who is/is not, should/should not be covered can cause a business to sustain very substantial fines.  If in the slightest doubt secure coverage through your insurance broker or directly from the State.  Ms. Tilles is being kept quite busy by employers receiving dreaded notices from the State.  Legal fees to defend such suits or to reduce the penalties are substantially more expensive than obtaining a Workers Comp policy and paying the premiums.

Jack had a freelance assistant years ago, get clocked by a falling equipment case, causing a gash on his head. This was not a full time assistant, but just a day at a time assistant. Jack made him go to the hospital where he got several stitches. The first question they asked the assistant at the hospital, the very first question was “Were you working when this happened?” Saying yes, automatically kicked in New York State’s Workman’s Comp Insurance. Jack carries Workman’s Comp Insurance policy and was fully covered. If he didn’t have a policy, Workman’s Comp would still fully take care of the assistant at the hospital, but the fun part would have started later, when the State would be knocking at Jack’s door with a whole bunch of questions. The small premium to carry Workman’s Comp prevented a huge, huge problem later. As Jack oft says, in business you can either eat well or sleep well. Jack sleeps fine.

In these hard economic times, all States are seeking to “raise revenue” in any way possible.  Such devices include imposing substantial fines on businesses who fail to carry Workers’ Compensation insurance whether or not someone has been injured. These investigations can be triggered by almost any seemingly unrelated government action including a so called “employee” quitting and then filing a bogus claim for unemployment insurance. It happens. Or having a case accidentally and unexpectedly falling down. There’s a reason they call them accidents, but not having the insurance is not an accident.