Is it legal to have someone new work for store credit instead of getting money?

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Is it legal to have someone new work for store credit instead of getting money?

New worker was told they ‘ don’t have
enough money’ so they will pay him
with store credit instead of cash.

Asked on June 8, 2016 under Employment Labor Law, Minnesota

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

So long as the employee being paid at a rate that is equivalent to the minimum wage, then this form of payment is legal. That is as long as they agree to this prior to perfoming their job duties. That having been said, if the employee does not consent to this method of pay, then they can either be scheduled for reduced hours or laid off completely. If terminated, under the circumstances they would be eligible for unemployment benefits.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

It is legal if the worker accepts payment in that form, though he or she would still need to be paid at a rate equivalent to at least minimum wage (i.e. store credit equivalent to at least minimum wage per hour worked). If the employee won't accept it, the employer can either not schedule him or suspend him or terminate him, while they don't have the money to pay; or let him work for cash. They can't force him to work for store credit, but don't have to let him work at all if they can't come to a mutually acceptable agreement as to pay.


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