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Is it illegal to offer my services to a friend for below minimum wage? [closed]
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I'd like to tutor my friend for $5 an hour. To me, this is a reasonable price because I'm getting more out of it than just the money (practicing my skills, spending time with a friend, doing a favor for my friend).
Is this ok?
salary
asked May 6 '15 at 16:05
PBeezy
828267
closed as off-topic by Justin Cave, DJClayworth, gnat, Elysian Fields♦ May 6 '15 at 19:37
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – Justin Cave, DJClayworth, gnat, Elysian Fields
suggest improvements |Â
up vote
0
down vote
favorite
I'd like to tutor my friend for $5 an hour. To me, this is a reasonable price because I'm getting more out of it than just the money (practicing my skills, spending time with a friend, doing a favor for my friend).
Is this ok?
salary
asked May 6 '15 at 16:05
PBeezy
828267
closed as off-topic by Justin Cave, DJClayworth, gnat, Elysian Fields♦ May 6 '15 at 19:37
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – Justin Cave, DJClayworth, gnat, Elysian Fields
2
Assuming you and your friend are in an area where the minimum wage is greater than $5/hour, yes, that would almost certainly be technically illegal. Is that a practical issue for you? Unless you brought a suit against your friend for underpayment of wages, or you did something funky from a tax perspective, it seems very unlikely that anyone would ever care. Plenty of kids babysit, do chores, work in the family business, etc. for less than the minimum wage. As it stands, though, this is a legal question so it should be closed as off topic.
– Justin Cave
May 6 '15 at 16:15
1
What country are you in?
– Zibbobz
May 6 '15 at 17:06
suggest improvements |Â
up vote
0
down vote
favorite
up vote
0
down vote
favorite
I'd like to tutor my friend for $5 an hour. To me, this is a reasonable price because I'm getting more out of it than just the money (practicing my skills, spending time with a friend, doing a favor for my friend).
Is this ok?
salary
asked May 6 '15 at 16:05
PBeezy
828267
I'd like to tutor my friend for $5 an hour. To me, this is a reasonable price because I'm getting more out of it than just the money (practicing my skills, spending time with a friend, doing a favor for my friend).
Is this ok?
salary
asked May 6 '15 at 16:05
PBeezy
828267
asked May 6 '15 at 16:05
PBeezy
828267
asked May 6 '15 at 16:05
PBeezy
828267
asked May 6 '15 at 16:05
PBeezy
828267
828267
closed as off-topic by Justin Cave, DJClayworth, gnat, Elysian Fields♦ May 6 '15 at 19:37
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – Justin Cave, DJClayworth, gnat, Elysian Fields
closed as off-topic by Justin Cave, DJClayworth, gnat, Elysian Fields♦ May 6 '15 at 19:37
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Questions seeking advice on company-specific regulations, agreements, or policies should be directed to your manager or HR department. Questions that address only a specific company or position are of limited use to future visitors. Questions seeking legal advice should be directed to legal professionals. For more information, click here." – Justin Cave, DJClayworth, gnat, Elysian Fields
2
Assuming you and your friend are in an area where the minimum wage is greater than $5/hour, yes, that would almost certainly be technically illegal. Is that a practical issue for you? Unless you brought a suit against your friend for underpayment of wages, or you did something funky from a tax perspective, it seems very unlikely that anyone would ever care. Plenty of kids babysit, do chores, work in the family business, etc. for less than the minimum wage. As it stands, though, this is a legal question so it should be closed as off topic.
– Justin Cave
May 6 '15 at 16:15
1
What country are you in?
– Zibbobz
May 6 '15 at 17:06
suggest improvements |Â
2
Assuming you and your friend are in an area where the minimum wage is greater than $5/hour, yes, that would almost certainly be technically illegal. Is that a practical issue for you? Unless you brought a suit against your friend for underpayment of wages, or you did something funky from a tax perspective, it seems very unlikely that anyone would ever care. Plenty of kids babysit, do chores, work in the family business, etc. for less than the minimum wage. As it stands, though, this is a legal question so it should be closed as off topic.
– Justin Cave
May 6 '15 at 16:15
1
What country are you in?
– Zibbobz
May 6 '15 at 17:06
2
2
Assuming you and your friend are in an area where the minimum wage is greater than $5/hour, yes, that would almost certainly be technically illegal. Is that a practical issue for you? Unless you brought a suit against your friend for underpayment of wages, or you did something funky from a tax perspective, it seems very unlikely that anyone would ever care. Plenty of kids babysit, do chores, work in the family business, etc. for less than the minimum wage. As it stands, though, this is a legal question so it should be closed as off topic.
– Justin Cave
May 6 '15 at 16:15
Assuming you and your friend are in an area where the minimum wage is greater than $5/hour, yes, that would almost certainly be technically illegal. Is that a practical issue for you? Unless you brought a suit against your friend for underpayment of wages, or you did something funky from a tax perspective, it seems very unlikely that anyone would ever care. Plenty of kids babysit, do chores, work in the family business, etc. for less than the minimum wage. As it stands, though, this is a legal question so it should be closed as off topic.
– Justin Cave
May 6 '15 at 16:15
1
1
What country are you in?
– Zibbobz
May 6 '15 at 17:06
What country are you in?
– Zibbobz
May 6 '15 at 17:06
suggest improvements |Â
3 Answers
3
active
oldest
votes
up vote
2
down vote
accepted
You could offer to help your friend for a glass of water if that's all you wanted.
Assuming US laws here - You aren't an employee of the friend so minimum wage laws don't apply. The business relationship is essentially a contractual one and anything of value can be offered for consideration in order for the contract to be . For example $1.00 or even an offer to trade an old t-shirt for services.
Now, if the value you receive is greater than $600 then you need to report it on your taxes and you're friend may have to issue a 1099. But that's something you need to discuss with a tax advisor.
answered May 6 '15 at 17:28
NotMe
20.9k55695
1
That's a legal opinion that I suspect is incorrect. If the original poster runs a legitimate tutoring company with multiple clients, he could certainly contract with his friend at an effective $5/hr rate. Barring that, however, it may be difficult to argue that the poster is a contractor rather than an employee. You can't just declare that you have a contractual relationship with someone and avoid wage and hour laws. The default is to assume that anyone paying anyone for services is an employer of an employee.
– Justin Cave
May 6 '15 at 18:42
1
@JustinCave: The IRS has a test for determining when a person is an employee vs a contractor. irs.gov/taxtopics/tc762.html This situation is pretty clear that the OP is operating as an independent contractor
– NotMe
May 6 '15 at 20:29
suggest improvements |Â
up vote
2
down vote
Yes, you are fine.
Minimum wage laws were designed to protect employees of businesses. You are offering tutoring as an individual, not as a company, so the laws do not apply to you.
answered May 6 '15 at 16:14
David K
20.8k1075110
1
Downvoted because the reason the laws don't apply aren't correct. The OP could be a company offering tutoring services and STILL only charge $1.00/hr if that's what they wanted to do.
– NotMe
May 6 '15 at 17:29
suggest improvements |Â
up vote
0
down vote
This is only an issue if you're going to be filing your earnings on your tax return this year.
Minimum wage laws are different depending on where you live (both in different countries, and in different states/regions of that country) so you will need to look up the specific laws for your own area - it's possible that tutoring positions are not even taxable, which would mean you don't have to declare those earnings.
But for a private agreement between you and your friend, you can more than likely keep all of your earnings under the table. Technically you are supposed to declare these earnings, and your friend likewise is supposed to declare his purchase of your services, but rarely will you actually find people filing for such small amounts.
If you are strictly concerned about minimum wage as a whole, you don't have to worry about that either - minimum wage applies to what you pay an employee, and as a tutor not affiliated with any company, you are your own employer, and you are not legally required to pay yourself a minimum wage.
answered May 6 '15 at 17:13
Zibbobz
6,68752453
"Avoid one potentially illegal action by engaging in another definitely illegal action [tax evasion]."
– stannius
Aug 18 '15 at 16:46
1
@stannius You're unlikely to be prosecuted for giving your friend a couple tutoring session in exchange for say, 25 dollars. You are very likely to be prosecuted for running and establishing a tutoring service and not declaring any of your income. It really depends on how much you make.
– Zibbobz
Aug 19 '15 at 3:13
suggest improvements |Â
3 Answers
3
active
oldest
votes
3 Answers
3
active
oldest
votes
active
oldest
votes
active
oldest
votes
up vote
2
down vote
accepted
You could offer to help your friend for a glass of water if that's all you wanted.
Assuming US laws here - You aren't an employee of the friend so minimum wage laws don't apply. The business relationship is essentially a contractual one and anything of value can be offered for consideration in order for the contract to be . For example $1.00 or even an offer to trade an old t-shirt for services.
Now, if the value you receive is greater than $600 then you need to report it on your taxes and you're friend may have to issue a 1099. But that's something you need to discuss with a tax advisor.
answered May 6 '15 at 17:28
NotMe
20.9k55695
1
That's a legal opinion that I suspect is incorrect. If the original poster runs a legitimate tutoring company with multiple clients, he could certainly contract with his friend at an effective $5/hr rate. Barring that, however, it may be difficult to argue that the poster is a contractor rather than an employee. You can't just declare that you have a contractual relationship with someone and avoid wage and hour laws. The default is to assume that anyone paying anyone for services is an employer of an employee.
– Justin Cave
May 6 '15 at 18:42
1
@JustinCave: The IRS has a test for determining when a person is an employee vs a contractor. irs.gov/taxtopics/tc762.html This situation is pretty clear that the OP is operating as an independent contractor
– NotMe
May 6 '15 at 20:29
suggest improvements |Â
up vote
2
down vote
accepted
You could offer to help your friend for a glass of water if that's all you wanted.
Assuming US laws here - You aren't an employee of the friend so minimum wage laws don't apply. The business relationship is essentially a contractual one and anything of value can be offered for consideration in order for the contract to be . For example $1.00 or even an offer to trade an old t-shirt for services.
Now, if the value you receive is greater than $600 then you need to report it on your taxes and you're friend may have to issue a 1099. But that's something you need to discuss with a tax advisor.
answered May 6 '15 at 17:28
NotMe
20.9k55695
1
That's a legal opinion that I suspect is incorrect. If the original poster runs a legitimate tutoring company with multiple clients, he could certainly contract with his friend at an effective $5/hr rate. Barring that, however, it may be difficult to argue that the poster is a contractor rather than an employee. You can't just declare that you have a contractual relationship with someone and avoid wage and hour laws. The default is to assume that anyone paying anyone for services is an employer of an employee.
– Justin Cave
May 6 '15 at 18:42
1
@JustinCave: The IRS has a test for determining when a person is an employee vs a contractor. irs.gov/taxtopics/tc762.html This situation is pretty clear that the OP is operating as an independent contractor
– NotMe
May 6 '15 at 20:29
suggest improvements |Â
up vote
2
down vote
accepted
up vote
2
down vote
accepted
You could offer to help your friend for a glass of water if that's all you wanted.
Assuming US laws here - You aren't an employee of the friend so minimum wage laws don't apply. The business relationship is essentially a contractual one and anything of value can be offered for consideration in order for the contract to be . For example $1.00 or even an offer to trade an old t-shirt for services.
Now, if the value you receive is greater than $600 then you need to report it on your taxes and you're friend may have to issue a 1099. But that's something you need to discuss with a tax advisor.
answered May 6 '15 at 17:28
NotMe
20.9k55695
You could offer to help your friend for a glass of water if that's all you wanted.
Assuming US laws here - You aren't an employee of the friend so minimum wage laws don't apply. The business relationship is essentially a contractual one and anything of value can be offered for consideration in order for the contract to be . For example $1.00 or even an offer to trade an old t-shirt for services.
Now, if the value you receive is greater than $600 then you need to report it on your taxes and you're friend may have to issue a 1099. But that's something you need to discuss with a tax advisor.
answered May 6 '15 at 17:28
NotMe
20.9k55695
answered May 6 '15 at 17:28
NotMe
20.9k55695
answered May 6 '15 at 17:28
NotMe
20.9k55695
answered May 6 '15 at 17:28
NotMe
20.9k55695
20.9k55695
1
That's a legal opinion that I suspect is incorrect. If the original poster runs a legitimate tutoring company with multiple clients, he could certainly contract with his friend at an effective $5/hr rate. Barring that, however, it may be difficult to argue that the poster is a contractor rather than an employee. You can't just declare that you have a contractual relationship with someone and avoid wage and hour laws. The default is to assume that anyone paying anyone for services is an employer of an employee.
– Justin Cave
May 6 '15 at 18:42
1
@JustinCave: The IRS has a test for determining when a person is an employee vs a contractor. irs.gov/taxtopics/tc762.html This situation is pretty clear that the OP is operating as an independent contractor
– NotMe
May 6 '15 at 20:29
suggest improvements |Â
1
That's a legal opinion that I suspect is incorrect. If the original poster runs a legitimate tutoring company with multiple clients, he could certainly contract with his friend at an effective $5/hr rate. Barring that, however, it may be difficult to argue that the poster is a contractor rather than an employee. You can't just declare that you have a contractual relationship with someone and avoid wage and hour laws. The default is to assume that anyone paying anyone for services is an employer of an employee.
– Justin Cave
May 6 '15 at 18:42
1
@JustinCave: The IRS has a test for determining when a person is an employee vs a contractor. irs.gov/taxtopics/tc762.html This situation is pretty clear that the OP is operating as an independent contractor
– NotMe
May 6 '15 at 20:29
1
1
That's a legal opinion that I suspect is incorrect. If the original poster runs a legitimate tutoring company with multiple clients, he could certainly contract with his friend at an effective $5/hr rate. Barring that, however, it may be difficult to argue that the poster is a contractor rather than an employee. You can't just declare that you have a contractual relationship with someone and avoid wage and hour laws. The default is to assume that anyone paying anyone for services is an employer of an employee.
– Justin Cave
May 6 '15 at 18:42
That's a legal opinion that I suspect is incorrect. If the original poster runs a legitimate tutoring company with multiple clients, he could certainly contract with his friend at an effective $5/hr rate. Barring that, however, it may be difficult to argue that the poster is a contractor rather than an employee. You can't just declare that you have a contractual relationship with someone and avoid wage and hour laws. The default is to assume that anyone paying anyone for services is an employer of an employee.
– Justin Cave
May 6 '15 at 18:42
1
1
@JustinCave: The IRS has a test for determining when a person is an employee vs a contractor. irs.gov/taxtopics/tc762.html This situation is pretty clear that the OP is operating as an independent contractor
– NotMe
May 6 '15 at 20:29
@JustinCave: The IRS has a test for determining when a person is an employee vs a contractor. irs.gov/taxtopics/tc762.html This situation is pretty clear that the OP is operating as an independent contractor
– NotMe
May 6 '15 at 20:29
suggest improvements |Â
up vote
2
down vote
Yes, you are fine.
Minimum wage laws were designed to protect employees of businesses. You are offering tutoring as an individual, not as a company, so the laws do not apply to you.
answered May 6 '15 at 16:14
David K
20.8k1075110
1
Downvoted because the reason the laws don't apply aren't correct. The OP could be a company offering tutoring services and STILL only charge $1.00/hr if that's what they wanted to do.
– NotMe
May 6 '15 at 17:29
suggest improvements |Â
up vote
2
down vote
Yes, you are fine.
Minimum wage laws were designed to protect employees of businesses. You are offering tutoring as an individual, not as a company, so the laws do not apply to you.
answered May 6 '15 at 16:14
David K
20.8k1075110
1
Downvoted because the reason the laws don't apply aren't correct. The OP could be a company offering tutoring services and STILL only charge $1.00/hr if that's what they wanted to do.
– NotMe
May 6 '15 at 17:29
suggest improvements |Â
up vote
2
down vote
up vote
2
down vote
Yes, you are fine.
Minimum wage laws were designed to protect employees of businesses. You are offering tutoring as an individual, not as a company, so the laws do not apply to you.
answered May 6 '15 at 16:14
David K
20.8k1075110
Yes, you are fine.
Minimum wage laws were designed to protect employees of businesses. You are offering tutoring as an individual, not as a company, so the laws do not apply to you.
answered May 6 '15 at 16:14
David K
20.8k1075110
answered May 6 '15 at 16:14
David K
20.8k1075110
answered May 6 '15 at 16:14
David K
20.8k1075110
answered May 6 '15 at 16:14
David K
20.8k1075110
20.8k1075110
1
Downvoted because the reason the laws don't apply aren't correct. The OP could be a company offering tutoring services and STILL only charge $1.00/hr if that's what they wanted to do.
– NotMe
May 6 '15 at 17:29
suggest improvements |Â
1
Downvoted because the reason the laws don't apply aren't correct. The OP could be a company offering tutoring services and STILL only charge $1.00/hr if that's what they wanted to do.
– NotMe
May 6 '15 at 17:29
1
1
Downvoted because the reason the laws don't apply aren't correct. The OP could be a company offering tutoring services and STILL only charge $1.00/hr if that's what they wanted to do.
– NotMe
May 6 '15 at 17:29
Downvoted because the reason the laws don't apply aren't correct. The OP could be a company offering tutoring services and STILL only charge $1.00/hr if that's what they wanted to do.
– NotMe
May 6 '15 at 17:29
suggest improvements |Â
up vote
0
down vote
This is only an issue if you're going to be filing your earnings on your tax return this year.
Minimum wage laws are different depending on where you live (both in different countries, and in different states/regions of that country) so you will need to look up the specific laws for your own area - it's possible that tutoring positions are not even taxable, which would mean you don't have to declare those earnings.
But for a private agreement between you and your friend, you can more than likely keep all of your earnings under the table. Technically you are supposed to declare these earnings, and your friend likewise is supposed to declare his purchase of your services, but rarely will you actually find people filing for such small amounts.
If you are strictly concerned about minimum wage as a whole, you don't have to worry about that either - minimum wage applies to what you pay an employee, and as a tutor not affiliated with any company, you are your own employer, and you are not legally required to pay yourself a minimum wage.
answered May 6 '15 at 17:13
Zibbobz
6,68752453
"Avoid one potentially illegal action by engaging in another definitely illegal action [tax evasion]."
– stannius
Aug 18 '15 at 16:46
1
@stannius You're unlikely to be prosecuted for giving your friend a couple tutoring session in exchange for say, 25 dollars. You are very likely to be prosecuted for running and establishing a tutoring service and not declaring any of your income. It really depends on how much you make.
– Zibbobz
Aug 19 '15 at 3:13
suggest improvements |Â
up vote
0
down vote
This is only an issue if you're going to be filing your earnings on your tax return this year.
Minimum wage laws are different depending on where you live (both in different countries, and in different states/regions of that country) so you will need to look up the specific laws for your own area - it's possible that tutoring positions are not even taxable, which would mean you don't have to declare those earnings.
But for a private agreement between you and your friend, you can more than likely keep all of your earnings under the table. Technically you are supposed to declare these earnings, and your friend likewise is supposed to declare his purchase of your services, but rarely will you actually find people filing for such small amounts.
If you are strictly concerned about minimum wage as a whole, you don't have to worry about that either - minimum wage applies to what you pay an employee, and as a tutor not affiliated with any company, you are your own employer, and you are not legally required to pay yourself a minimum wage.
answered May 6 '15 at 17:13
Zibbobz
6,68752453
"Avoid one potentially illegal action by engaging in another definitely illegal action [tax evasion]."
– stannius
Aug 18 '15 at 16:46
1
@stannius You're unlikely to be prosecuted for giving your friend a couple tutoring session in exchange for say, 25 dollars. You are very likely to be prosecuted for running and establishing a tutoring service and not declaring any of your income. It really depends on how much you make.
– Zibbobz
Aug 19 '15 at 3:13
suggest improvements |Â
up vote
0
down vote
up vote
0
down vote
This is only an issue if you're going to be filing your earnings on your tax return this year.
Minimum wage laws are different depending on where you live (both in different countries, and in different states/regions of that country) so you will need to look up the specific laws for your own area - it's possible that tutoring positions are not even taxable, which would mean you don't have to declare those earnings.
But for a private agreement between you and your friend, you can more than likely keep all of your earnings under the table. Technically you are supposed to declare these earnings, and your friend likewise is supposed to declare his purchase of your services, but rarely will you actually find people filing for such small amounts.
If you are strictly concerned about minimum wage as a whole, you don't have to worry about that either - minimum wage applies to what you pay an employee, and as a tutor not affiliated with any company, you are your own employer, and you are not legally required to pay yourself a minimum wage.
answered May 6 '15 at 17:13
Zibbobz
6,68752453
This is only an issue if you're going to be filing your earnings on your tax return this year.
Minimum wage laws are different depending on where you live (both in different countries, and in different states/regions of that country) so you will need to look up the specific laws for your own area - it's possible that tutoring positions are not even taxable, which would mean you don't have to declare those earnings.
But for a private agreement between you and your friend, you can more than likely keep all of your earnings under the table. Technically you are supposed to declare these earnings, and your friend likewise is supposed to declare his purchase of your services, but rarely will you actually find people filing for such small amounts.
If you are strictly concerned about minimum wage as a whole, you don't have to worry about that either - minimum wage applies to what you pay an employee, and as a tutor not affiliated with any company, you are your own employer, and you are not legally required to pay yourself a minimum wage.
answered May 6 '15 at 17:13
Zibbobz
6,68752453
answered May 6 '15 at 17:13
Zibbobz
6,68752453
answered May 6 '15 at 17:13
Zibbobz
6,68752453
answered May 6 '15 at 17:13
Zibbobz
6,68752453
6,68752453
"Avoid one potentially illegal action by engaging in another definitely illegal action [tax evasion]."
– stannius
Aug 18 '15 at 16:46
1
@stannius You're unlikely to be prosecuted for giving your friend a couple tutoring session in exchange for say, 25 dollars. You are very likely to be prosecuted for running and establishing a tutoring service and not declaring any of your income. It really depends on how much you make.
– Zibbobz
Aug 19 '15 at 3:13
suggest improvements |Â
"Avoid one potentially illegal action by engaging in another definitely illegal action [tax evasion]."
– stannius
Aug 18 '15 at 16:46
1
@stannius You're unlikely to be prosecuted for giving your friend a couple tutoring session in exchange for say, 25 dollars. You are very likely to be prosecuted for running and establishing a tutoring service and not declaring any of your income. It really depends on how much you make.
– Zibbobz
Aug 19 '15 at 3:13
"Avoid one potentially illegal action by engaging in another definitely illegal action [tax evasion]."
– stannius
Aug 18 '15 at 16:46
"Avoid one potentially illegal action by engaging in another definitely illegal action [tax evasion]."
– stannius
Aug 18 '15 at 16:46
1
1
@stannius You're unlikely to be prosecuted for giving your friend a couple tutoring session in exchange for say, 25 dollars. You are very likely to be prosecuted for running and establishing a tutoring service and not declaring any of your income. It really depends on how much you make.
– Zibbobz
Aug 19 '15 at 3:13
@stannius You're unlikely to be prosecuted for giving your friend a couple tutoring session in exchange for say, 25 dollars. You are very likely to be prosecuted for running and establishing a tutoring service and not declaring any of your income. It really depends on how much you make.
– Zibbobz
Aug 19 '15 at 3:13
suggest improvements |Â
2
Assuming you and your friend are in an area where the minimum wage is greater than $5/hour, yes, that would almost certainly be technically illegal. Is that a practical issue for you? Unless you brought a suit against your friend for underpayment of wages, or you did something funky from a tax perspective, it seems very unlikely that anyone would ever care. Plenty of kids babysit, do chores, work in the family business, etc. for less than the minimum wage. As it stands, though, this is a legal question so it should be closed as off topic.
– Justin Cave
May 6 '15 at 16:15
1
What country are you in?
– Zibbobz
May 6 '15 at 17:06