Equine Working Student and Apprentice
It's the law!
Some time ago, I received this query from a concerned parent.
“My daughter was offered a job as a “Working Student” at the horse farm she rides at. She would work around the horse farm and receive free riding lessons in return. Upon calling my state Revenue Department and the IRS I found out that this was “barter income” and would have to be reported as income. In addition, there are W2-related regulations and working paper issues (my daughter is 16 years old). Not doing the paperwork, and associated taxes, is illegal. The horse farm said that was ridiculous and the working student arrangement is a industry standard and they would not file any paperwork (neither 1099 or W2) nor get involved in workers comp. or other labor-reporting issues. The Dept. Of Revenue asked me to provide them with information so they could audit the farm. My question: Has my daughter been offered to “work under the table” illegally, or is this just a misunderstanding?
There is a group of “common practices” in the horse industry that are legally questionable or even down right illegal. With the way our legal system works, everyone is on their honor to obey the law. With many laws, there is no one who comes around to make sure you are complying. Wage and hour laws and other employment related laws are frequently like that. This means that all sorts of illegal employment practices may be going on, and unless someone reports the violation, the the employer is very likely to get away with the practice. However, the excuse that “everybody does it that way” while it may be true, does not make any practice legal.
There have been instances over the years of high-profile well-respected Working Student or Apprentice programs being taken to task by the authorities for questionable practices. However, the most extreme violations are usually in small operations that do not have an ongoing “program”, but just hire one or two people as Working Students or Apprentices. The worst situations usually occur when someone is hired as a Working Student and there is no formal arrangement for time spent working vs. time spent learning. In cases like this, the employer is simply using the term Working Student to try to justify paying a substandard wage for a normal job. An employer does not have the right to pay less than minimum wage, just because a job includes some on-the-job training. On the other hand, if there is a formal arrangement for lessons or other advanced level training in exchange for work and the times for work and times for training are clearly spelled out, then the position may be a genuine Working Student or Apprentice position.
In situations like this the value of the training given must be commensurate with the amount of work being done, or the person must be paid some cash in addition to receiving the training. I am not an attorney and you may need to consult one. However, Working Student and Apprentice positions fall under employment laws just like any other position. Individual state laws may be more restrictive than federal laws in some states. Here is a link to the Department of Labor with information on laws relating to apprenticeships.
http://www.dol.gov/compliance/topics/wages-apprenticeships.htm.
If you hire Working Students or Apprentices, beware. Even if no cash changes hands, your Working Student or Apprentice is still your employee and must be treated as such. Child labor laws apply. Wage and hour laws apply. Tax laws apply. From my subsequent conversations with the writer of the above quote , it seems likely that the employer in question will be “turned in” to authorities and may face dire consequences. Don’t put yourself in a position to be “brought down” by an angry parent or disgruntled employee. Contact your attorney or tax adviser for information on the correct way to hire Working Students and Apprentices.
