Corepower Yoga owns and operates yoga studios nationwide. The company had a program entitled “Yoga for Trade,” under which customers worked 2-3 hours a week cleaning and performing other tasks at their studio in exchange for free yoga classes. That program was modified under another called “Studio Experience Team,” with the participants being paid wages for similar work. However, the wages were required to be applied towards yoga memberships, resulting in pay for hours worked at less than minimum wage.
As might be expected, one of the participants in these programs became disgruntled and brought a class and collective action lawsuit against Corepower in federal court in California seeking wages for hours worked under both programs. Corepower agreed to settle for a whopping $1,650,000.
The lesson here for private employers is that (with exceptions so limited they are not worth mentioning) if an individual is allowed to work, he or she must be paid wages in accordance with state and federal law. “Creative” programs to try to circumvent that fact will fail, and could cost your company a lot of money. Our experts can help you stay out of wage and hour nightmares like this.