Is it illegal for a company to use the services of its employees to do work on the owner’s personal residences and not pay for it?

Construction company of about 20 employees offers profit sharing. The owner’s son who works for the company built a house and the owner is currently building a house. They have been using some of their employees to do the work during normal work hours and paying them their regular wage. What we have noticed is that the last couple of years, the profit sharing has been doing very poorly. I would assume it is because they are not charging their own company for the work their employees are doing on their own homes. The company is incorporated.

Asked on February 17, 2016 under Business Law, Minnesota


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

This is 100% legal, unless there is some written employment or other agreement barring it. In the absence of a contract to the contrary, the managers of a company have free rein to decide what work to have employees do, and the law does NOT require that a company make good or profitable decisions.

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