Great thread, even if the original post suggested a less-than-great situation.
Here are some thoughts based upon my experience:
1. I have cut local political ads on company time, which my boss did as a favor to the local politicians. It makes no difference whether the company is being paid or not, as long as the employee doing the work is getting paid. When someone is a salaried employee, the project being worked on at a given time is not directly funding the employee’s pay for the same time period. In fact, the employee should not care whose money is going into his pocket.
2. Any company of any size should have a handbook or employee manual, listing the rules and regulations regarding pay, overtime, comp time, benefits, grievances etc. If there is no policy to handle a situation, a friendly meeting needs to be held to discuss the matter in a non-threatening way.
3. We periodically use freelance shooters and pay their rates. For example, we may pay $1500 for a full day two-man crew. Of course this is more than two full time salaried employees make in one day, but this is not apples to apples. Freelancers on this board can tell you that the $1600 a day is not profit, given the overhead of being an independent operator.
Mike Cohen