“Will you walk into my parlor?” said the spider to the fly.

Expectations and reality are two very different things.

For many employees, working for a start up company can seem like a dream: complete creative freedom, constant brainstorming sessions, flexible work hours and a dynamic, out-of-the-box team environment.

While the possibilities of a start up role are virtually limitless – so are the perils.

Here we dispel 6 common corporate myths perpetuated by small businesses to retain dream employees in nightmare conditions.

Myth 1: There is no such thing as job security in start up companies

Positions in startups are emotionally, psychologically and financially demanding.

A common strategy used by inexperienced entrepreneurs is to shift much of this burden from the shoulders of company directors to employees. Placing staff on short-term contracts with zero job security allows unethical businesses to influence behavior and motivate employees through a performance-based cycle of negative reinforcement. In some cases real or perceived failure to generate sufficient income to justify your role is used in connection with a threat of termination of employment.

This predator-prey strategy is a potent form of corporate manipulation that generates higher employee output through longer hours and less leave.

Escaping the web

Don’t operate in a vacuum.

Understand your rights and entitlements and communicate these to your employer. Threat of termination of employment (whether overt or implied), coercion and false or misleading representations about workplace rights are hallmarks of an organisation openly exploiting staff.

Myth 2: We are all doing it tough financially but if you work hard we will reward you!

Beware of employers who use notions of transparency as emotional leverage to tip the salary bargaining scales against you.

Startups that project complete openness with staff while withholding important financial statistics, timelines for company growth and long-term plans for employees are often masking a hidden agenda. Broad future-based promises about the creation of permanent work generates a powerful culture of indoctrination, particularly in companies contracting a young and dynamic workforce.

Promises of long term employment after an initial and unspecified period of ‘start up hardship’ are rarely kept.

Employees who empathise with what they are led to believe are the shared financial struggles of their employer are less likely to request salary increases, assert rights to leave entitlements and superannuation or even permanent roles. Staff become conditioned to work towards company goals with little or no remuneration.

Escaping the web

Don’t allow yourself to be strung along by a corporate illusion. Identify employers that are more interested in their bottom line than the welfare of employees.

Key indicators are companies who focus on vanity metrics such as number of staff, number of social media followers and email subscribers as evidence of rapid expansion and success. A disproportionate emphasis on artificial growth indicators often conceals deeper systemic issues.

With no clear business model and hard evidence to support claims of explosive growth, unethical employers are free to exploit employee loyalty and garner an ‘above-and-beyond’ attitude with zero accountability to follow through with the promise of career progression, promotion or increased pay.

Understand your rights and keep abreast of changes to standard wages in your industry.

Myth 3: As a contractor you do not have the same entitlements as an employee

A common strategy used by unethical businesses is to engage staff in sham contracting arrangements.

This involves deliberately disguising an employment relationship as an independent contracting relationship to avoid employer obligations – for example, computers and basic equipment, paid leave entitlements, superannuation, workers compensation, compliance with OH&S and tax laws and consistent work hours.

The result is the mirage of a thriving organisation; the reality is a company operating on a shoestring to the overall detriment of employees.

Escaping the web

Sham contracting is illegal.

Insist on an employment contract before accepting any new job.

Read the contract thoroughly to determine your conditions of employment. Make a conscious note of anything that may detrimentally impact you and raise it with your employer before signing.

Even if your contracting arrangement seems legitimate you may be entitled to full employee benefits and protections.

Early indicators of a sham arrangement are where your employer has:

• asked you to register an ABN before being hired (especially where your current work is your primary source of income);
• told you that for tax purposes it is more beneficial to you to work as a contractor;
• held off or seemed reluctant to provide you with an employment contract;
• made assurances that the contractual engagement you accept is temporary with ‘near future’ steps towards a streamlined HR system and full employee entitlements.

Unethical employers are highly practiced in the art of subtle manipulation. This behaviour points to someone seeking to evade employer obligations under the guise of a contractual relationship. Your employer cannot use the above unfair tactics or any other mechanism (whether overt or implied) to induce you to accept unsatisfactory work arrangements.

If you suspect that you have been hired under a sham contracting scheme, check your employment arrangements against the below checklist:

Reproduced from Fair Work Australia

Myth 4: Internships are about working, not about learning ….right?

Wrong.

Beware of startups running bogus unpaid internship programs.

Unethical employers have been known to make false or misleading statements to induce unpaid work that is used to better everyday operations and expansion of the company without complying with the Fair Work Act 2009. 

Job seekers in the entertainment, media, marketing and non-profit industries are particularly susceptible to exploitation. With an endless supply of recent graduates willing to do whatever it takes to get a foot in the door, inexperienced staff looking to further their career are easily manipulated into supplying a continuous free work force. Hopeful interns are often promised future paid work that fails to materialise.

Escaping the web

If you wish to undertake an internship first ensure that the program is legitimate.

You can do this by seeking information on program:

• Duration – generally speaking, the longer your internship program runs, the greater the likelihood it constitutes an employment relationship.

• Content and structure – is your program intended to be a learning and professional development experience or will you be undertaking work that goes towards normal business operations of the company? Do you come into work at a specified time? Work to specific tasks and deadlines? If so, it’s likely you are engaged in more than just observational learning and that an employment relationship has formed.

• Significance to business operations – will you complete work that directly benefits or goes towards normal business operations? If you were not undertaking this work would it ordinarily be completed by a paid employee? The higher the calibre of work you are completing the more likely you have entered an employment relationship.

• Benefits – who is benefiting more from the program? The main rewards should pass to you in the form of skills acquisition and experience. If the balance of benefits is skewed in favour of the company there is a good chance you are in an employment relationship and are entitled to fair pay.

An unpaid internship program that amounts to an employment relationship means you are entitled to protections such as a minimum wage, compliance with National Employment Standards and the terms of any relevant award or enterprise agreement.

On the other hand, if you are completing work experience as part of an authorised educational training program (such as school or university coursework requirement) and your role is purely observational then your employer is legally not required to pay you.

Myth 5: Your dream job exists, you just need to create it

Company owners who give with one hand by promising your dream job but take with the other by failing to provide support, resources and training play a dangerous game of psychological abuse.

Identifying features of these employers are those who have an unreasonable expectation of the time, mental & emotional energy and financial investment you should be making for the greater good of the company.

Intra-office dialogue and meetings are used to establish unrealistic expectations of staff work level commitment. Failure to work overtime and weekends with no pay is equated with lack of commitment and often results in veiled threats about your future with the company. Often this is less a product of your efficiency and more a product of work pressure being inversely directed to you through unachievable work targets.

Escaping the web

Beware of companies selling a dream.

This can quickly evaporate to reveal a nightmare.

If something seems wrong don’t ignore it. Minor tell tale signs are usually the first indicators that something nefarious is happening on a much larger scale.

It is unlawful for your employer to:

• do something that adversely affects you in certain circumstances;
• coerce you into doing something through fear, intimidation of threats;
• use extreme pressure or influence to make you alter your employment conditions;
• make a knowingly false representation that you will rely on.

Do your research, trust your instincts and learn to identify the early warning signs.

Myth 6: This is just what start up life is like!

Perhaps the most pervasive myth hatched by unethical businesses is that control over company culture is absolute.

Either you fit in, or you leave.

Some employers go so far as to manufacture their own corporate folklore to divert attention away from all manner of evil. Office chatter such as “this is just start up life!” is used as a calculated blanket excuse to justify much of what we discuss in Myths 1-5.

At their worst, company directors actually start to believe their own mythology.

This type of corporate Stockholm Syndrome can ensnare hopeful employees in a web of lies and deceit. Staff who don’t know any better are at risk of ongoing emotional/psychological abuse from employers who understand the system and how to manipulate it.

The impact on employees can result in the unwitting acceptance of:

• second rate office conditions and facilities;
• a toxic company culture (for example, one that fosters gender inequality, sexual harassment, offensive language or bullying and harassment);
• no pay increases or other entitlements;
• ever-changing employment conditions;
• flagrant disregard for staff safety and wellbeing.

Escaping the web

Be wary of employers who make you doubt yourself, your judgement and your abilities.

Identifying unfair pressure and emotional or psychological abuse is not easy.

Skilled manipulators are successful at exercising power and control because their tactics can almost never be traced to an aggressive act. An important warning sign is an employer who uses subtle emotional manipulation by way of critical analysis on aspects of your personality, character or personal life.

For example, you may justifiably express concerns about accepting a job without signing an employment contract. In this case, an experienced emotional manipulator responds by redirecting the question to you and away from his/her unlawful activity:

“Some people need employment contracts in order to feel secure. But the rest of our staff are happy to take risks and live week-to-week”.

Don’t be fooled. This statement is carefully crafted strategy designed to stop you asking the right questions.

If you’re questioning yourself, you’re not questioning the company or the decisions being made about it or your future. 

Still unsure about whether any of this applies to you? Consider the following scenarios:

Your health is often the best point of reference. Chronic stress, headaches, increased blood pressure, heart palpitations, exhaustion, insomnia, weight loss and brittle hair are some of the main signs you are compromising yourself in the interests of the company.

Ongoing and extreme cases can lead to Battered Worker Syndrome.

Un-spinning the lies – when to call it quits

If something sounds too good to be true ….it probably is.

Take your cue from the tale of the spider and the fly and learn how to separate myth from reality.

Analyse your situation and make an informed decision about the best time to cut your losses and move on.

These days success in start up life is less about persevering in the face of an impossible situation as knowing the best time to leave.

Identifying corporate propaganda is an important first step to minimise the time you waste in the wrong start up and safeguard your future.

Looking for further information and resources?

For more information contact the Independent Contractors Hotline: 1300 667 850

To complain about a sham contacting arrangement contact:

• Fair Work Ombudsman: 131 394
• Australian Building and Construction Commission: 1800 003 338
• Your local union.

The Fair Work Ombudsman and Building and Construction Commission have powers to prosecute employers who contravene these laws.

Do you have anything to add to this story? Tell us about it in the comments section below.