This seems ridiculous and unenforceable. Has anybody ever been arrested or charged with working for free?
Apparently Obama is working toward allowing people to work for free in Georgia, at least. I imagine there is some kind of slippery slope toward abuse that is of concern to some people.
What it really means is that with each person you allow to "volunteer" for you are opening yourself up to liability that they could sue for back payment of minimum wage if they ever became disgruntled. Same goes for people who work for sweat equity. This doesn't mean a startup should never make such arrangements, it just means a startup should be careful and consider the risk (e.g hiring one key employee vs having an army of volunteers).
Apparently Obama is working toward allowing people to work for free in Georgia, at least. I imagine there is some kind of slippery slope toward abuse that is of concern to some people.