I've done some checking into how many martial arts schools are run, and a great many do exactly the same thing! In fact, I've found several websites that go so far as to speak of how students are given the opportunity to "give back" and "learn more" by volunteering as teacher assistants and instructors--they go so far as to say this would look great on a college application. More often than naught, giving back isn't for some non-profit business aspect of the martial arts school, but for the school itself and the owners.
Just wanted to let you know that your article really got me thinking--the martial arts school that my sons have attended all these years and I've recommended to so many isn't what I thought. It is a cult that really has no interest in making my sons black belts unless they "give back and give back and give more." I see things through a whole new light now, and see how much they expect and are given by so many of the students in hopes of attaining that black belt. In fact, a teen was recently awarded another belt rank (same level as my son's) even though he tested with a torn ACL and couldn't compare in physical ability as my son at his testing. It is now very obvious that there are exceptions made when it comes to belt advancement when the student in question gives countless hours to teaching. He knows the forms, but can't perform them at the level expected of all others, but hey, he works hard teaching for us. He can tell you how to do it, but don't ask him to demonstrate.
I'd be interested in your opinion about the violation of labor codes as you believe they apply to martial arts schools.