I'm in a computer science master's program in a university in asia. It's a three-year program, and halfway through our first year, our professor told us to come work for him at his company during our free time. I thought it would be a good way to get some experience so I went along with it. He gave us a little bit of pay but it was irregular and we never knew how much we would get.
After a while, he said we should come work for him at his company everyday unless we had class. My classmates and I didn't want to go anymore, because the work was only vaguely research-related and completely unrelated to our desired thesis topics. At this point, we were all uncertain if whether what we were doing was just research or actually a job. There was no contract or anything. One classmate said he wanted to stay on campus to focus on his research, and our professor belittled his research ideas and told him that working for him would be much more valuable.
At the end of my first year, I got a great offer for a part-time internship in another company. When I told my professor that I wouldn't be coming to his company anymore, he was not pleased. He told me he wouldn't be able to help much with my thesis. Eventually he gave me permission but it's most likely because I'm American, and I get treated slightly better than my local classmates.
When another classmate tried to leave, our professor gave him a very difficult software problem and said that if this student could solve it, then he could leave the company. The assignment was in an area that this student has no prior experience in, so he was unable to solve it and was too afraid to try to leave again.
From what I've heard, this is a common situation in our department and in other universities in the area. Since I've never done graduate school in the U.S. or anywhere else, I don't know if this is accepted behavior or not. I want to inform my classmates of the choices they have. So, on their behalf I want to ask:
What kind of position is this? Would this be considered an internship, research assistance, or just research?
In the global academic world, do professors have the authority to require their students to work for them? Should my classmates have the option to do something else?
Related: A while ago I read this question about masters students working for a professor's profit-making company. I can fully understand the value of turning research into commercial benefits. I have no problem with this part. However, in this answer, someone asks if the students feel coerced into working with him. In this situation, I believe the answer is a yes, and basically I'm wondering what to do about it.