It's real simple, they are taking advantage of you. What they are doing is probably illegal. You need to stop working for free, now. This is a form of a sweatshop and I'd advise getting out now. I know that's generally not immediately possible, but you need to do yourself a favor and find a new job.
Compliance Assistance - Wages and the Fair Labor Standards Act (FLSA)
-Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009.
-Hours Worked (PDF) : Hours worked ordinarily include all the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace.
Definition of "Employ"
By statutory definition the term "employ" includes "to suffer or permit to work." The workweek ordinarily includes all time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed work place. "Workday", in general, means the period between the time on any particular day when such employee commences his/her "principal activity" and the time on that day at which he/she ceases such principal activity or activities. The workday may therefore be longer than the employee's scheduled shift,
hours, tour of duty, or production line time.
Lectures, Meetings and Training Programs: Attendance at lectures, meetings, training programs and similar
activities need not be counted as working time only if four criteria are met, namely: it is outside normal hours, it
is voluntary, not job related, and no other work is concurrently performed.
IANAL, but it looks like what your employer is doing is illegal. You and your coworkers should report this company for their unfair wages. Reporting this to the correct authorities provides whistleblower protections. Not that I'd want to continue working for this company, but it can provide protection against discrimination, firing, blacklisting, and other forms of making your life miserable. Doing this anonymously or by stating you wish to remain anonymous from disclosure should protect you. If they start punishing everyone, you can report that, too.
erickson brings up a good question.
The below article says that a contractor isn't covered by labor laws.
Yet they are apparently treated as an employee. There's only a few details in the Question along these lines, so it's not 100% clear, but that's what I get out of it. Which means to me that they could be incorrectly classified as a contractor and are actually an employee. My advice is based on this idea. When I read the Question, it didn't read as a contractor, it read as an employee.
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done.
- Behavioral Control: A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. ...
- Financial Control: Does the business have a right to direct or control the financial and business aspects of the worker's job? ...
- Relationship: The type of relationship depends upon how the worker and business perceive their interaction with one another. ...
Consequences of Misclassifying an Employee
Classifying an employee as an independent contractor with no reasonable basis for doing so makes employers liable for employment taxes. Certain employers that can provide a reasonable basis for not treating a worker as an employee may have the opportunity to avoid paying employment taxes.
Workers who believe an employer improperly classified them as independent contractors can use Form 8919 to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation.
It's not beyond the realm of possibility this company is classifying the OP as an independent contractor to try to avoid all the legal problems with their current way of trying to pay their workers. This is shady as anything, and needs to be reported.