Even if they're providing you an advance, it seems like they would still be required to pay you minimum wage
I'm still well above minimum wage. The $1000/month example from earlier was just a fictitious number for expository purposes.
Are they basically saying they won't pay you for the next 3 months, then they following 3 months they will pay you double?
It's more like they're paying me, but not paying the government. But that just means that next April 15th there's going to be a tax bill with no withholdings against it, and the IRS is going to make somebody to pay it.
have they asked you to sign anything saying something like "I accept this as an advance against future hours worked?"
No, nor would I sign such a thing. Though I think asking employees to take a straight up paycut, with some prior explanation, would've been a less shady way to handle the situation.
One thing that would concern me is if you are looking for a job and you decide to leave your current employer, will you be required to pay back your advances? It seems like a possibility.
It hasn't been discussed, but I'd like to see them try and make that stick. Though I guess it's possible they could just declare bankruptcy, in which case I'd probably be hosed.
It has occurred to me that this is a transparent attempt to avoid paying taxes. I have no specific knowledge of a federal law that this would violate but I know the IRS usually frowns on things that are done solely to dodge taxes with no other business justification. Also, an advance is a payment for services not yet performed, but we're paid in arrears. So it appears that they're intentionally miscategorizing income for the purposes of avoiding taxes. Again, it seems like the IRS would be displeased.
Additionally, I think this runs afoul of the
Colorado Wage Act. The "Pay Statements" section says I should get a paystub with withholdings itemized, but of course there isn't one because they didn't do withholdings. The "Pay Periods and Paydays" section says that I have to be paid (not advanced) every 30 days, which has been missed. The "Wages Owed/Paid on Demand" section says they have to pay my back wages. And the "Nonwaiver of Rights" section says I couldn't waive those rights even if they had given me something to sign.
My current plan is to let this be for now, and quit as soon as I can find another gig. At that point I'll demand that they square up all the "advances" into proper salary with paid-up withholdings and provide pay stubs to prove it. If they balk at that, then I can file a complaint with the state Department of Labor, and possibly the IRS if I can figure out how. Hopefully the threat alone will be enough to settle things.
Thanks again for all your thoughts on this, everyone.