Source: http://www.elinfonet.com/fedarticles/9/3
Timestamp: 2019-04-22 12:19:00+00:00

Document:
A four-factor test would be used to determine whether two or more employers are joint employers with respect to an employee under the Fair Labor Standards Act (FLSA) - and therefore jointly liable for any violations of the law's minimum wage and overtime requirements - under new rules proposed by the US Department of Labor (DOL).
On April 1, 2019, the Department of Labor (DOL) announced that it will publish a notice of proposed rulemaking (NPRM) to amend its existing regulations regarding joint employment under the Fair Labor Standards Act (FLSA). This is no April Fools’ Day joke, as a joint employer is jointly and severally liable with the employer for all wages due to the employee under the FLSA. As expected, the NPRM aims to provide stakeholders with clear, bright line rules regarding the circumstances in which an employer may be deemed a joint employer of another company’s employees. This is the first meaningful proposed revisions to the FLSA’s joint-employer regulation since it was originally promulgated in 1958.
Awarding bonuses to certain employees who participate in an optional volunteer program does not mean that an employer must pay them for the time they spend volunteering, according to a new opinion letter from the US Department of Labor (DOL).
On February 28, 2019, the United States Court of Appeals for the Fifth Circuit issued an important decision involving whether contract workers in the oil patch were entitled to overtime. In William Parrish, et al. v. Premier Directional Drilling, L.P., No. 17-511089, the Fifth Circuit reversed a trial court decision and rendered judgment in favor of Premier Directional Drilling, L.P. (“Premier”). Following a fact-intensive inquiry, the Fifth Circuit concluded that the directional drillers were not employees and not entitled to overtime under the Fair Labor Standards Act (“FLSA”).
As schools let out and the days get hotter, your company may be looking to take on a summer intern.
Dear Littler: I work in the corporate office of a national retailer. We plan to hire several local student interns to work for us this summer, primarily in accounting and marketing. We enjoy sponsoring this program, and it works out well. In fact, in the past, we have hired a handful of summer interns as full-time employees after they graduated. We intend to offer some basic training on specific job duties, along with some broader exposure to various departments and our industry. Interns will likely assist our regular staff with “real” work, under close supervision. We like our internships to be unpaid because then we can take on more students and put the funding into memorable program activities. But now I’m wondering: should we be paying these interns?
Summer Interns: Who Are They and Are You Classifying Them Properly?
As the summer draws near, many companies are considering bringing on summer interns. Interns are students or trainees who work in an organization in order to gain work experience or satisfy educational requirements. An internship can, and hopefully will, benefit the company that uses such a program. For example, internships may provide a pool of potential new hires for the company, serve as a source of inexpensive labor, foster a positive public image and community relations, and can build beneficial relationships with local communities and educational institutions. The question that always arises is: Does a company have to pay its summer interns? The short answer is: It depends on how you structure your intern program.
Executive Summary: On December 8, 2017, the United States Court of Appeals for the Second Circuit (which has jurisdiction over federal district courts in Connecticut, New York and Vermont) ruled in favor of an employer, holding that six unpaid interns were not “employees” for purposes of the Fair Labor Standards Act (FLSA). See Wang v. Hearst Corp. To reach its conclusion, the court used the flexible “primary beneficiary test” it first promulgated in Glatt v. Fox Searchlight Pictures. The court’s application of the test in Wang created some confusion for employers.
This month, the Department of Labor (DOL) announced that it will be using a new method to determine whether interns and students employed by a for-profit employer should be paid employees under the Fair Labor Standards Act (FLSA) and, thereby, entitled to minimum wage and overtime pay.
Employers interviewing for their upcoming summer internship programs now have more flexibility and less risk of wage and hour litigation due to a significant policy turnaround by the U.S. Department of Labor (DOL).
The U.S. Department of Labor recently announced a significant change in its interpretation of the Fair Labor Standards Act (FLSA) with respect to interns. The FLSA, of course, regulates an employer’s duty to pay minimum wage and overtime compensation to its employees. For years, the DOL has employed a six-factor test to determine whether these requirements apply to interns working for private employers.
The Department of Labor has decided to align its analysis under the Fair Labor Standards Act (FLSA) of the intern-vs.-employee determination with that of the majority of federal appellate courts to have addressed the issue, abandoning the stricter Obama-era analysis. The agency announced on January 5, 2018, that it was adopting the “primary beneficiary” test to determine the employee status of interns and students.
Executive Summary: Recently, the US Department of Labor (DOL) announced that it will adhere to a new test for determining whether interns qualify as employees under the Fair Labor Standards Act (FLSA). The FLSA requires for-profit employers to pay “employees” for their work; however, whether interns or students qualify as “employees,” and, thus, are entitled to compensation for services provided, has been the subject of considerable litigation. In its statement, the DOL abandoned the six-factor test it instituted in 2010, and instead endorsed the “primary beneficiary” test which was established by the Second Circuit in Glatt v. Fox Searchlight Pictures, Inc. Further, the DOL stated that the Wage and Hour Division’s investigators will “holistically analyze internships on a case-by-case basis.” This is a strategic change in the DOL’s enforcement policies to align its procedures with several circuit court decisions.
The U.S. Department of Labor (USDOL) just announced that it will abandon its six-part test for determining whether interns qualify as employees after yet another court favored the alternative, primary beneficiary test. As we have blogged about before, the agency historically has taken the position that six factors control whether an intern of a for-profit employer is, in fact, an employee. The USDOL’s articulated test required that each and every factor be met to exclude the individual from the FLSA’s minimum wage and overtime protections. But with Friday’s announcement, the agency instead lined up with a number of federal courts that have adopted a more flexible approach.
The US Department of Labor (DOL) has rescinded its longstanding "six-factor test" for determining whether an intern qualifies as an employee under the Fair Labor Standards Act (FLSA) in favor of the more employer-friendly "primary beneficiary test."
The U.S. Court of Appeals for the Seventh Circuit has affirmed U.S. District Judge William T. Lawrence’s dismissal of the student-athlete litigation against the NCAA and over 120 NCAA Division I member schools alleging that student-athletes are employees who are entitled to a minimum wage under the Fair Labor Standards Act.
Executive Summary: A recent Southern District of New York opinion brings clarity to the Second Circuit’s new intern-employee “primary beneficiary” test. The court in Wang v. Hearst Corporation (Aug. 24, 2016), held that unpaid interns working at magazines owned by a media company were not “employees” for purposes of the Fair Labor Standards Act and granted summary judgment in favor of the media company.
Subway, the nation's largest fast food franchise, has entered into a voluntary agreement with the US Department of Labor to encourage its 27,000-plus US franchisees to comply with the Fair Labor Standards Act (FLSA) and other federal labor laws.
A federal district court in Indiana has dismissed a major Fair Labor Standards Act (FLSA) lawsuit brought by University of Pennsylvania track athletes against the National Collegiate Athletic Association (NCAA) that could have placed more than 100 universities at significant liability risk. The suit had claimed that student athletes meet the criteria for temporary employees of their universities and should be covered under the FLSA.
Last week, an Indiana federal court dismissed a lawsuit brought by former University of Pennsylvania (“Penn”) athletes against the National Collegiate Athletic Association (“NCAA”) and a number of its member schools over their alleged employment status and corresponding minimum wage protection under the FLSA. Berger, et al. v. NCAA, et al., S.D. Ind., No. 1:14-CV-01710, 2016 U.S. Dist. LEXIS 18194, Feb. 16, 2016. In Berger, the Named Plaintiffs pursued a nationwide collective action against not only their own alma mater, but also more than 120 schools they never attended. Plaintiffs’ alleged in their Amended Complaint that, by virtue of their participation on Penn’s track and field team, they became employees of Penn for purposes of the FLSA entitled to be paid at least minimum wage for the “work” they performed as student athletes. The Court did not agree.
The Republican leadership of a congressional oversight committee has started investigating inter-agency communications in response to the Obama Administration’s attempts to hold business franchisors accountable for labor law violations of their franchisees.
Earlier this week, the federal Department of Labor issued a new administrator’s interpretation (No. 2016-1) providing “additional guidance” for determining when an employee is considered “jointly employed” by two or more employers for purposes of the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Workers Protection Act (MSPA).
Readers will recall that, last July, the Second Circuit U.S. Court of Appeals (with jurisdiction over Connecticut, New York, and Vermont) adopted a "primary benefit" framework for determining whether a for-profit entity's unpaid intern is or is not an "employee" for purposes of the federal Fair Labor Standards Act.
Joining decisions from other parts of the country, a California federal judge has held that former cosmetology and “hair design” students were not “employees” under the Fair Labor Standards Act or the wage-and-hour laws of California and Nevada entitled to minimum wage. Benjamin v. B & H Education, Inc., et al., 2015 U.S. Dist. LEXIS 144351 (N.D. Cal. Oct. 16, 2015).
With the recently published interpretation from the Department of Labor regarding who is considered an employee for the purposes of the Fair Labor Standards Act (and the DOL's ominous pronouncement that "most workers are employees") the shadow workforce of interns, volunteers, independent contractors and temporary workers has become even murkier. FordHarrison has prepared a Wage and Hour Toolkit, Shadow Workforce: Blurred Lines Can Lead to Real Wage Hour Liability, to help employers navigate this shifting and often perilous landscape. The Toolkit also provides best practices to help employers light a path through the dark to avoid wage and hour liability in these areas.
A recent decision by the Eleventh Circuit Court of Appeals appears to reject the U.S. Department of Labor’s oft-recited six-factor test, which is used to determine whether interns are actually functioning as employees. In Schumann v. Collier Anesthesia, P.A., et al, No. 14-13169 (September 11, 2015), instead of the six-factor test, the court endorsed a primary beneficiary test designed to account for the economic realities of modern-day internships for academic credit and professional certification.
This morning, the 9th Circuit Court of Appeals ruled that the NCAA is subject to antitrust laws and that its payment rules are too restrictive in attempting to maintain amateurism. However, in what can only be deemed a victory for the NCAA, the court also ruled that antitrust law requires only that the NCAA permit its schools to provide up to the cost of attendance to their student-athletes, and nothing beyond that (O’Bannon v. NCAA).
We reported in July that the Second Circuit U.S. Court of Appeals (with jurisdiction over Connecticut, New York, and Vermont) laid out seven non-exhaustive factors as part of a "primary beneficiary" analysis for evaluating whether unpaid interns are "employees" for purposes of the federal Fair Labor Standards Act. In so doing, the Second Circuit refused to follow the test urged by the U.S. Department of Labor.
Cases challenging the independent contractor status of certain service providers under the wage-and-hour laws are likely to continue in the near future due to the difficulties in applying the law to complex factual patterns. The Department of Labor recently provided additional guidance for determining contractor status in the form of an Administrator’s Interpretation (and the National Labor Relations Board also weighed in, modifying its view of “joint employment” in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015)). A recent case involving Uber drivers may be a bellwether. O’Connor, et al. v. Uber Technologies, Inc., N.D. Cal. C-13-3826.
If you are a regular reader of this blog, you are probably familiar with the six-factor test that the U.S. Department of Labor uses to determine whether an intern should be considered an employee for purposes of the Fair Labor Standards Act.
On September 11, the U.S. Court of Appeals for the Eleventh Circuit issued a decision which is likely the most recent development of the law surrounding whether student interns or trainees should be considered “employees” under the Fair Labor Standards Act (“FLSA”).
The Court of Appeals for the Eleventh Circuit last week adopted the Second Circuit’s “primary beneficiary” test as the appropriate test for determining whether an unpaid clinical intern was truly an “employee” within the meaning of the FLSA. Schumann v. Collier Anesthesia, P.A., 2015 U.S. App. LEXIS 16194 (11th Cir. 2015).
Another Court has joined those holding providers of content to online portals are not employees within the meaning of wage-and-hour laws. Joining a decision from the Court of Appeals for the Second Circuit, which rejected a claim brought by Huffington Post bloggers several years ago, Judge Richard Seeborg of the Northern District of California has rejected the FLSA complaint of individuals who claimed they were employees based on their writing of reviews contained on popular local restaurant review service Yelp. Jeung v. Yelp, Inc., 2015 U.S. Dist. LEXIS 107427 (N.D. Cal. Aug. 13, 2015).
Last year, Judge John G. Koeltl of the Southern District of New York ruled that individuals who served as volunteers at the 2013 Major League Baseball All Star Weekend FanFest, a four-day event centered around the All Star Game, were not entitled to minimum wage because they were “employed by an establishment which is an amusement or recreational establishment . . . [which did] not operate for more than seven months in any calendar year.” On Friday, the Court of Appeals for the Second Circuit affirmed that decision.
How should an employer determine whether unpaid interns at a for-profit employer are employees under the Fair Labor Standards Act entitled to compensation for services provided?
Two weeks after the U.S. Department of Labor issued an Administrator's Interpretation cautioning that "most workers are employees," Senators Bob Casey (D-PA) and Al Franken (D-MN) introduced a bill targeting worker misclassification. The Payroll Fraud Prevention Act of 2015 would make a number of amendments to the Fair Labor Standards Act to require employers to delineate employees from non-employee contractors, impose additional employer reporting requirements, and establish new penalties for misclassification violations.
In a move that is expected to have far-reaching consequences for employers, the U.S. Department of Labor issued new guidance on the classification of independent contractors as employees under the Fair Labor Standards Act (FLSA). Dr. David Weil, the DOL Wage and Hour Administrator, issued a July 15, 2015 Administrative Interpretation (the "Interpretation") warning employers that the definition of "employ" is very broad under the FLSA.1 The guidance reads as an argument, complete with references to favorable federal court decisions, which will likely be used to support future DOL enforcement actions.
The Department of Labor has just issued a new Administrator’s Interpretation to clarify its interpretation of “employee” under the Fair Labor Standards Act. Administrator’s Interpretation 2015-1 is the latest development in the DOL’s ongoing focus on workers misclassified as independent contractors (its “Misclassification Initiative”).
Executive Summary: Today, the Wage and Hour Division of the U.S. Department of Labor (DOL) issued an interpretation in furtherance of its Misclassification Initiative, which concludes that "most workers are employees under the FLSA's broad definitions." See Administrator's Interpretation 2015-1: The Application of the Fair Labor Standards Act's "Suffer or Permit" Standard in the Identification of Employees Who Are Misclassified as Independent Contractors. The Interpretation does not change the "economic realities" test courts currently apply in determining whether a worker is an independent contractor. It does, however, emphasize that each factor of the economic realities test must be applied consistently with the broad definition of "employ" found in the Fair Labor Standards Act (FLSA); that is, whether the worker is economically dependent on the employer and is, therefore, "suffered or permitted to work" by the employer.
DOL guidance on independent contractor classification provides another arrow in the Department’s enforcement quiver.
The Administrator of the US Department of Labor’s (DOL) Wage & Hour Division, David Weil, has issued a formal Interpretation on the subject of “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who Are Misclassified as Independent Contractors,” the DOL’s first on the issue since President Obama took office in 2008. Administrator’s Interpretation No. 2015-1, July 15, 2015.
The U.S. Labor Department's Wage and Hour Division has released "Administrator's Interpretation No. 2015-1" to address what it characterizes as the "problematic trend" of allegedly misclassifying workers as independent contractors rather than as employees for purposes of the federal Fair Labor Standards Act. This development was of course anticipated in light of last month's remarks by the Division's Administrator, Dr. David Weil. In explaining why the agency concluded that such guidance is needed, the Interpretation enumerates a now-familiar list of the consequences resulting from "misclassification" where the FLSA is concerned, including a failure to pay non-exempt employees at least the FLSA-required minimum wage and/or overtime compensation due for all hours worked in a workweek. The Interpretation's asserted aim is to curtail the perceived misclassification phenomenon by clarifying how the standard for determining whether an individual is an FLSA "employee" can help the "regulated community" classify workers correctly.
As previously promised, the Department of Labor today issued its eighth Administrator’s Interpretation (“AI”) since the 2010 implementation of this form of guidance. Today’s Interpretation, as expected, reflects the current Department’s position that the governing analysis is the economic realities test which, in the Department’s view, is used to determine “whether the worker is economically dependent on the employer” rather than the full “economic realities” of the parties’ arrangement. Unsurprisingly, under this analysis the Department expresses its view that “most workers are employees under the FLSA.” DOL Administrator’s Interpretation No. 2015-1 (July 15, 2015). This view is consistent with the position expressed by DOL at the agency level in its investigations. The balance of the fifteen-page AI discusses the factors that should be used in applying the “economic realities” test and provides examples of workers who satisfy and fail to satisfy each factor, collecting case law finding workers to be employees under the FLSA.
The US Department of Labor (DOL) today issued a new "administrator's interpretation" intended to help employers figure out whether to treat workers as employees or independent contractors under the Fair Labor Standards Act (FLSA).
On July 2, 2015, the U.S. Court of Appeals for the Second Circuit issued two eagerly awaited decisions that may dampen the recent wave of collective and class actions filed by unpaid interns claiming they should be paid employees. In Glatt v. Fox Searchlight Pictures, Inc. et al., Nos. 13-4478 & 13?4481 (2d Cir. 2015) and Wang v. Hearst Corp., No. 13?4480?cv (2d Cir. 2015) (summary order), the court announced a new “primary beneficiary test,” identified seven non-exhaustive factors relevant to classifying interns as employees in the for-profit sector, and rejected strict application of the six factor test promulgated by the United States Department of Labor (DOL). Equally noteworthy, the court largely foreclosed collective and class certification in intern cases by emphasizing the highly individualized inquiry required by its new test.
On July 2, 2015, the Second Circuit Court of Appeals issued a decision regarding the employment status of unpaid interns that should prove helpful to employers. In Glatt v. Fox Searchlight Pictures, Inc., Nos. 13-4478 and 13-4481, the Second Circuit overturned a decision by the U.S. District Court for the Southern District of New York, which had granted partial summary judgment holding that two unpaid interns were employees subject to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The lower court also granted class and conditional collective action certification of putative classes of unpaid interns.
We have been following developments in Glatt v. Fox Searchlight Pictures since former unpaid interns filed the lawsuit in 2011 seeking (among other things) back-wages under the federal Fair Labor Standards Act. In June 2013, the lower federal court ruled that at least two of the unpaid interns should have been deemed "employees" for purposes of the FLSA's requirements.
Establishing an unpaid internship program has become less risky for employers in New York, Connecticut and Vermont in the wake of a new appeals court ruling.
Over the past year or so, we have discussed the Fair Labor Standards Act’s application to both paid interns and unpaid interns, as well as independent contractors. One area we have covered briefly in the past, but not explored in depth, is the issue of volunteers. If you have been reading along, you know by now that if an individual is an employee (as opposed to a properly classified unpaid intern or independent contractor, for example), he or she cannot waive the protections of the FLSA. In other words, unless the employee is subject to an exemption, an employer must pay the employee at least the minimum wage for all hours worked, plus an overtime premium for all hours worked over forty in a week. State laws, too, provide similar requirements. But what about volunteers? Many nonprofit organizations, public agencies, schools, churches, and other similar entities would cease to exist, or at least be severely crippled, if not for the contributions and involvement of volunteers. Can an individual volunteer their services? The answer might surprise you.
In the past, we’ve explained the DOL’s test for whether employers must pay their interns. Put simply, public employers and qualifying not-for-profit entities do not have to pay their interns. I hope that our more recent discussions of lawsuits that demonstrate the ever-narrowing segment of lawful unpaid internships have spurred some discussions and re-examination among readers of this blog who have internship programs. Judging by some of the calls and e-mails we have received since then, employers have begun seriously considering whether those unpaid internships are really free labor. However, hope is not lost—it is still possible to have unpaid interns under the right circumstances, as one recent New Jersey case demonstrated.
Employers across the country are increasingly utilizing independent contractors to fill an ever-expanding array of positions. These jobs range from sophisticated, high-tech engineers and logistics professionals to doctors, nurses, construction workers, and food service providers. But employers who seek to classify workers as independent contractors to avoid the expenditures associated with payroll, taxes, benefits, and capital improvements, or feel further incentivized to do so by the Affordable Care Act, should take note: Courts are sending a clear message that such practices can be costly.
Educational institutions of all kinds often utilize the services of volunteers or so-called interns to assist with coaching sports or other extracurricular activities, and to participate in programs that are mutually beneficial. But the United States Labor Department (DOL) has issued clear guidance with respect to unpaid internships and the circumstances under which an educational institution’s current staff may be converted to volunteers, or others may serve as volunteers for certain purposes.
In the past, we’ve explained the DOL’s test for whether employers must pay their interns. Put simply, public employers and qualifying not-for-profit entities do not have to pay their interns.
We wrote some time ago about a lower federal court's determination in Glatt v. Fox Searchlight Pictures that at least two unpaid interns were "employees" for federal Fair Labor Standards Act purposes.
They’re fetching coffee for movie studio executives, or handling millions of dollars’ worth of rare art and antiques. Some are writing stories for major magazines and newspapers. Quite a few can be found working in the White House.
A federal trial court in Florida recently issued a significant decision on the issue of unpaid trainees under the FLSA, finding that 25 former students of Wolford College were not employees when they participated in a clinical training program as part of the college's Masters of Nurse Anesthesia program.
With the summer drawing near and many high school and college students looking to bolster their resumes, a new set of eager-to-please interns will appear in offices around the country, bringing some youthful exuberance to the office. For most, the addition of interns roaming the halls will be a positive experience for all involved. For others, however, in particular employers who may view interns as little more than “free labor,” costly litigation could be lurking right around the corner.
Memorial Day weekend has passed, the Major League Baseball season is in full swing, and summer is upon us. With apologies to Roger Kahn, for us wage and hour practitioners, the “Boys of Summer” (and girls!) are the wave of workers joining employer workforces for the next few months. Whether they are interns in your office, lifeguards at your pools and beaches, or the thousands of seasonal hospitality and service workers joining payrolls, if you are adding staff this summer, it’s time for our annual summer reminders.
Summer is approaching and with it comes the end of the school year and a new crop of students hoping to gain experience in their chosen careers by working as interns or trainees. Additionally, non-profit organizations often see an increase in volunteers during the summer break. These opportunities can be valuable for both the companies and the individuals involved, but companies must carefully delineate the responsibilities of trainee and volunteer positions and classify workers appropriately. Failure to do so can result in unanticipated liability under federal and state wage and hour laws, as demonstrated by recent high-profile cases involving interns.
We have already reported that a group calling itself the "Fair Pay Campaign" aims to pressure colleges and universities not to facilitate unpaid internships or even post notices about them. This initiative appears to be gaining momentum.
We have long warned that one should not simply assume that an internship associated with or sponsored by an educational institution falls outside of the federal Fair Labor Standards Act's requirements. Our caution includes situations in which the intern receives academic credit for the time so spent.
Should The White House Be Paying Its Interns?
As was anticipated in light of the intensified focus upon internships over three years ago, the next stage was a spate of high-profile lawsuits by unpaid or allegedly-underpaid interns under the federal Fair Labor Standards Act and/or state wage-hour laws. One of them was filed last May against Elite Model Management Corporation under the FLSA and similar New York state laws.
With the abundance of college graduates scrambling for too few paid jobs, many employers are nabbing them for unpaid internships—hoping to keep this talent until paid positions become available. But employers need to be careful with this approach so as not to run afoul of the federal minimum wage and overtime law.
Unpaid summer internships are routine for some businesses, especially those in creative fields such advertising, design, music, publishing and film – all areas that have flourished locally in recent years.
Summer has arrived and many employers have already supplemented their operations with student interns, but the question we see crop up repeatedly is, “do I have to pay interns?” In the last few years, with a more competitive job market and corporate focus on reducing costs, we have seen an increase in the use of unpaid interns. Unfortunately, not all internships can be unpaid.
Still Willing To Have Unpaid Interns?
We have repeatedly cautioned that employers who are prepared to take on unpaid interns should enter into these arrangements with their eyes fully open. New developments emphasize this yet again.
We’ve warned clients for some time now that businesses and other organizations should think carefully if they are considering the possibility of permitting unpaid internships. What might be described as the internship “season” is fast-approaching, so the time to consider whether and under what circumstances to get involved in these relationships is now.
As the end of another academic year approaches, college students across the country are seeking summer employment opportunities. As a result, your organization may soon be faced with the question of whether to hire summer interns. Sure, you could use the extra hands to help out – but do you really have to pay them? After all, the company would be providing an invaluable learning experience and on-the-job training to high school and college students, while receiving little back in “corporate gains.” But before you start employing “free” labor, it is important to understand what the U.S. Department of Labor (DOL) has to say about for-profit employers paying their interns.
There was a significant increase in the number of class actions in 2012 brought by former interns, many of whom were in unpaid positions working in the business sector. But recently the educational community received a wake-up call when Hamilton College was hit with a class action involving its paid interns.
There was a significant increase in the number of class-action lawsuits in 2012 brought by former interns, many of whom were in unpaid positions working in the business sector. But recently the educational community received a wake-up call when Hamilton College was hit with a class-action lawsuit involving its paid interns.
We have warned for some time now that businesses and other organizations should think carefully if they are considering the possibility of permitting unpaid internships. What might be described as the internship "season" is fast-approaching, so the time to consider whether and under what circumstances to get involved in these relationships is now.
Volunteerism is again on the upswing as the holiday season enters its most-intense period. Businesses and other organizations should reacquaint themselves with the principles summarized in our November 2011 post cautioning that some "volunteers" or "volunteer" activities might be subject to the requirements of the FLSA.
Perhaps only two types of people could walk into an adult-entertainment establishment and ask "I wonder if these dancers are properly paid in accordance with the Fair Labor Standards Act?" The first would be plaintiffs' attorneys. The second would be agents from the Department of Labor.
As we reported earlier, a former Harper's Bazaar unpaid intern is pursuing a lawsuit against publisher The Hearst Corporation in which she claims (among other things) to have been an "employee" under the federal Fair Labor Standards Act who was not compensated in compliance with that law.
A few readers were surprised by our April 3 post's caution that, in some scenarios, a volunteer performing work for a federal Fair Labor Standards Act-covered non-profit organization might be an "employee" subject to that law's compensation requirements.
Are "Volunteers" The Answer For Non-Profits?
A reader of our March 14 post relating to unpaid internships at non-profit organizations asks whether non-profits can avoid the intern debate by offering "volunteer" opportunities to engage in charitable or public-service activities. But this simply changes the nature of the potential problem.
Is your unpaid intern really an employee? If you're relying on the fact that the intern receives college credit, you need to read this.
Our earlier post prompted questions about whether federal Fair Labor Standards Act principles are different for unpaid internships at non-profit organizations or for those sponsored by educational institutions for which the intern receives academic credit. The short answer is: No, they are not.
Are Unpaid Internships Worth The Risk?
For awhile now, unpaid internships have been a hot topic under the federal Fair Labor Standards Act. We noted some time ago that the U.S. Labor Department was taking a skeptical view of these relationships.
It's no secret that today's economy is tough. The result? Business vets are joining this year's crop of students as fall interns. They will work away â€“ often for free â€“ in hopes of a future job, a resumÃ© builder and even to sample "the real world."
The holiday spirit moves many to volunteer for activities of a benevolent nature. An organization to which such individuals donate services should consider the possibility that they might be "employees" under the federal Fair Labor Standards Act. Getting this wrong could result in liability for back-wages, child-labor penalties, and other remedies.
Last month, a federal judge in New York granted preliminary approval for a settlement in which Hofstra University agreed to pay up to $485,000 to a class of 256 undergraduate and graduate students who allegedly were not paid minimum wage and overtime in violation of the Fair Labor Standards Act. The plaintiff class included both students who the University classified as hourly employees and others who received stipends as undergraduate and graduate assistants. Because the case was settled, the court never reached a judgement as to whether the students who received stipends were "employees" entitled to minimum wage and overtime under the FLSA. That begs the question, when must a student be considered an "employee" for purposes of minimum wage and overtime?
In September 2011, in the wake of its continuing worker classification audit program, the Internal Revenue Service (IRS) announced the Voluntary Classification Settlement Program (VCSP), a voluntary initiative allowing taxpayers the opportunity to change the prospective classification of their workers at a low cost. Taxpayers seeking to apply to the VCSP for the fourth quarter of 2011 must act quickly to meet the initial deadlines set by the IRS.
Hospitality employers sometimes wonder whether it's possible for individuals to participate in kitchen activities as unpaid interns or on a tryout basis, typically as chefs or cooks. Among the many questions this raises is whether such people would be "employees" who are subject to the federal Fair Labor Standards Act's requirements.
AVOIDING PITFALLS WITH INTERNSHIPS: DOL EXPLAINS WHEN INTERNS MUST BE COMPENSATED (pdf).
In the current job market, more and more employers are receiving requests from applicants for unpaid internships. These offers can be tempting. However, the adage “look before you leap” is especially applicable in this situation, and employers should be cautious before entering an internship relationship.
Internship Programs Face Increased Regulatory Scrutiny.
At this time of year, many firms take on interns, typically undergraduate students who perform a variety of tasks for the company. In many instances, these interns are unpaid or receive only a modest stipend. With the recent economic downturn, more companies than ever are tempted to use unpaid interns to supplement their existing paid workforce.
Wage & Hour Talk Podcast: "Should Your Unpaid Interns Actually Be Paid?"
Franczek Radelet attorneys Katie B. Schreiber and Mark S. Wilkinson discuss wage and hour issues in a brief podcast, which you can hear on our Web site or download to your computer or audio player.
Education Labor Letter: "I'll Do It for Free!"
Many people are moved to volunteer their time to schools for religious, humanitarian, charitable, or other public-service reasons. No one wants to discourage these impulses, of course, but a school must be careful not to set itself up for a dispute over whether such a person is actually an employee for purposes of the federal Fair Labor Standards Act (FLSA). Being wrong about this could result in substantial exposure for things like minimum-wage and overtime payments, penalties for child-labor violations, and other liability.
Labor Board’s Rulings Trump All Other Laws (Almost).
The National Labor Relations Act (NLRA) protects employees' "concerted activities" which, generally speaking, are any actions by employees undertaken as a group with respect to wages, hours and working conditions – whether or not in a formal "union" context. What happens when these NLRA protections conflict with an employer's compliance with other workplace laws?
‘Tis The Season To Volunteer -- Maybe.
The holiday spirit moves many to volunteer their time for activities of a humanitarian, religious, charitable, or other public-service nature. No one wants to discourage these laudable impulses, but an organization must be careful not to entangle itself in unforeseen disputes over whether these individuals are really "employees" for wage-hour purposes. Getting this wrong could expose you to substantial potential liability for things like minimum-wage and overtime payments, penalties for child-labor violations, and so forth.
Do Your Internships Comply With Wage-Hour Law?
Internships offer students unparalleled opportunities to gain real world experience and hands-on career development. The practical work experience derived from internships allows students to develop contacts, identify areas of interest, and gain an edge in an increasingly competitive job market.
The Wage/Hour Cocktail: One Part Work, One Part Love, Mix Well (Tastes Awful).
But as often happens, the relationship went South and Hirsch began seeing someone else. Steelman then sued, seeking lost wages and damages under the Fair Labor Standards Act.
You may think that you're working with a "partner", until things head south: your former associate may make an FLSA claim for unpaid wages.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.