Much of the bootstrapped-startup culture we celebrate may thus rely on lax enforcement of these laws.

Also, the IRS doesn't enforce minimum wages and labor laws, so its definitions aren't necessarily relevant. (For example, it will tax equity compensation that doesn't count toward minimum wage calculations.)

So you may be right, but I'm not yet convinced. The strict letter of the law seems to suggest that corporations must pay even their founders minimum wages.

And if there's some 'bright-line' rule that clearly tells us when this is not the case, I've never heard it. (For example, if "5%" is traditionally enough ownership, by statute or administrative ruling, to count someone as an owner rather than employee, that would be very good to know -- you could have exactly 20 equal founders and no investors and still have founders bootstrap with their own donated labor.)

"In order to qualify as an unpaid internship, the requirement is simple: no work can be performed that is of any benefit at all to the company. That is, you can not deliver mail, sort files, file papers, organize a person’s calendar, conduct market research, write reports, watch television shows and report on them, read scripts, schedule interviews, or any other job that assists the employer in any way in running their business."

http://laborlaw.typepad.com/labor_and_employment_law_/2007/1...