I wasn’t planning on even writing today. I had an early morning meeting, then a check-up for the sinus infection/zombie flu that’s had me hacking for a few days. Behind me at Brueggers, was a redhead in a blazer and a gentleman in a suit. He didn’t ask much about her background, except if she had majored in marketing or sales, (?!) I listened intently as she answered and he asked about her family and boyfriend. Then… it struck me. I was witnessing an illegal interview. Suddenly, the bagel with cream cheese and my Diet Coke were going to accompany a very interesting lunch. And oh, it was.

 

Job Scam or True Opportunity? 

I soon found out after intently listening that this wasn’t a job interview as much as a sales pitch, (which is always the first indication anyone should run- especially this young, late teens to early twenty-something.) Shouldn’t the job seeker have an equal opportunity to “sell” or proclaim their worth? This young woman had no idea what lay just ahead of her- long hours, door-to-door sales and burn-out… all before 23. The two women next to me started giggling when he mentioned that his job afforded him the opportunity to have “finely-tailored suits.” But that’s when my interesting lunch turned to angry bites of bagel: This was a scam. She didn’t know- and how COULD she know? So, I started live-tweeting the interview.

Others in our vincinity were rolling their eyes and we were all motioning to one another, “Can you believe this?!”  We were all tuned-into unethical drivel from an individual who had no intention of finding out whether this candidate was a fit. She was simply a warm body for an organization that as I suspected earlier- wasn’t as it portrayed. Entry-level marketing. Outdoor Sales. It’s all the same. I’ve seen and heard many like it before.

 

Many of the job postings exclaim: 

“Marketing and Sales. Entry-Level!”

“Marketing Manager!”

“Join a growing marketing and sales company!”

“Account Executives Wanted!”

I didn’t want to believe it was happening, but the truth is- it happens, every year. In late winter to early spring, new companies arise- with promises to a young, eager workforce. They classify themselves as agencies in marketing or sales. Sometimes, they make it two years. Sometimes, it’s only a season. The collateral isn’t the clients- but the young, disillusioned workers they leave behind. It’s almost always a scam and in today’s economy- where graduates can’t find meaningful work out of school, it hurts even more. So, I”ll rephrase this post from 2009- because while companies are still allowed to abuse young job seekers like this, I’m still going to discuss it.

 

Wait… Is it A Pyramid Company? 

Pyramid Companies will not help your resume. You will not gain valuable experience that is atypical of usual offices or organizations. How can you tell if it’s a Pyramid-based company? There are dead giveaways. Some even happen in the first interview. Then the entire point of the company is to bring multiple people in as. “entry-level” and advance them to, “management,” it’s a clear indication. If you put in your time and make, “management” you’ll be in charge of recruiting individuals like the earlier and more naive version of yourself. Sound like fun? While mom and dad state, “you need to put in your dues,” or, “everyone has to start somewhere!” it’s your responsibility to research the company where you’ll be working. Remember- your resume depends on it.

 

As a job seeker it’s hard to know whether a posting is a scam. Here’s 5 ways you can tell: 

Do your research. Be it Hoovers, Google, Indeed or Glassdoor. make sure you know WHERE you are applying and WHAT they do. Is their company description vague? Did you look at the bbb.org website? Do they have any complaints? Have you checked in with your local Workforce center to see if they know anything additional about the company?  That means you need to investigate further. Direct sales is often telemarketing. Outdoor sales is door-to-door. If you don’t know about the company, how can you expect them to give you the same consideration? Research takes time upfront, but can save the hassle in the long-run and save you time away from landing a much better job.

Check The Location. They want you to come in for an interview? Verify their location and that it is actually an office. Don’t be afraid to do a drive-by- and make sure the building isn’t rundown, or just a culmination of other leased one-room suites.

Is It a Big Sale? Meaning, does the company have a lot to say about their numbers, or their team. Do you FEEL sold to? If that’s the case, something isn’t right. Remember that in a true interview, it’s a two way conversation- not a sales pitch.

How Are You Paid? Your biggest indicator of a job’s authenticity is the pay structure. Is it 100% commission? Dan Lind brings up an excellent point that opportunity has a cost- but is the cost your own livelihood? He states, “Young workers should experience how to succeed, before taking chances on a 100% commission position. Recruiters feast on young, ambitious & naive grads, which is wrong.” Dan is very, very, right. While seasoned sales professionals may be willing to take a risk, the young and inexperienced are often hurt the most by strictly-commission jobs. Most importantly, are you paid for training? Most laws dictate that you must be paid for your time. You should never be volunteering a half-day or whole day for training. Sometimes these companies call training, “ride-alongs” to “show you the ropes.” Technically you should be on-the-clock and have filled out your W-2 forms. If you haven’t done that before your first day, then you could be classified as 1099- meaning, you’re in charge of all the taxes from your, “pay checks.” Scary stuff for young workers who may not know better!

Do They Have Solicitation Licenses? Going door to door isn’t just annoying- it can be illegal in some areas- especially in certain town-home associations and office buildings. Without a solicitation license, you’re a willing counterpart and could be in trouble as well.

 

Remember: An employee is at the discretion of their employer. A 1099 contractor sets their own hours and uses their own equipment. If you see a violation of this in the workplace, make sure to contact your state labor board. 

 

Tie-In to Human Trafficking? 

Most importantly- while you wouldn’t typically think of door-to-door sales as a funnel to human trafficking. Did you know Minnesota is 3rd in the nation for human trafficking? What used to only happen to people selling magazines out West, is now happening for products and people of all ages around the globe. Find out more here.

 

Should They Be Regulated? 

Fact: ALL employers are regulated by national and local labor laws. While some believe they’re already covered, I believe it deserves a closer look- especially when it comes to labor laws. Here’s a handy guide to state labor laws. Regulation is already in place, but companies like the one I witnessed today are awfully good at skirting those regulations or zipping through loopholes like not allowing their employees to take breaks, or wrongly classifying employees as 1099 contractors, (which many of these companies practice regularly.) Why would they do this? Not only does the company eliminate the worker’s compensation payments and benefits are not paid. However, in a 2013 report from MPR, misclassified employees can cause big troubles for an organization.

The U.S. Department of Labor and the Internal Revenue Service are investigating businesses that misclassify workers as contractors. Some workers have filed lawsuits that allege businesses denied them benefits by wrongly classifying them as contractors. ”In some cases, employers are aggressively fighting these claims because the downside of an adverse decision could be quite significant,” said Chuck Knapp, a Minneapolis lawyer who represents companies on worker classification issues. “The amount of fines or liability or settlement you see ranges from thousands to millions.” (MPR)

How Can We Stop It? 

The FTC has an excellent resource to investigate job scams with a serious emphasis put on MLM or Pyramid schemes. You can read up on their thoughts and how to report a potential scam right here.  

“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.” (FTC.gov)