I know this guy. He's kind of a dirtbag. I'm friends with someone who worked at his hostel in Austin; he was in charge of various events and hanging out with the visitors, along with all the other hostel duties. After a few years of working for less than minimum wage (there was lots of unpaid overtime), he was denied a raise. This was in spite of the hostel turning a very healthy profit every year. He wised up and ended up getting a much better paying gig elsewhere.

He could probably get away with this at the hostel (which is in a popular city), but hiring people for minimum wage in the middle of nowhere is a different story.