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THE DEPARTMENT OF LABOR ISSUES NEW GUIDELINES WHEN HIRING INTERNS

Posted by David Katz | Jan 25, 2018 | 0 Comments

A. MAKE SURE YOUR BUSINESS FOLLOWS THE NEWEST DEPARTMENT OF LABOR REGULATIONS.

In reaction to the very recent decision by the Ninth Circuit Court of Appeals in Benjamin v B & H Education, Inc, the United States Department of Labor has discarded its six-part test for determining whether interns and students are employees under the Fair Labor Standards Act as it pertains to for-profit employers. Under the prior test, two of the factors suggesting a bona fide internship was established by whether the internship experience was for "the benefit of the intern and that the employer derives no immediate advantage of the intern." In response to these decisions, in late December of 2017, the Department of Labor issued a press release stating that "going forward the Department of Labor will conform to these appellate court rulings by using the same "primary beneficiary test" that these courts use to determine whether interns are employees under the FLSA." 

On January 8, 2018, the Department of Labor, through its website, identified seven factors employers should consider when determining whether an intern is an employee and they are as follows:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation, and any promise of compensation, express or implied, suggests that the intern is an employee. 

2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment. including the clinical and other hands-on training provided by educational institutions.

3. The extent to which the internship is tied to the intern's formal education program by integrated course-work or the receipt of academic credit.

4. The extent to which the internship accommodates the intern's academic commitments by corresponding to the academic year.

5. The extent to which the internship's duration is limited to the period in which the internship provides the intern with beneficial learning.

6. The extent to which the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.

7. The extent to which the intern and the employer understand that the internship is conducted without an entitlement to a paid job at the conclusion of the internship.

The Department of Labor has made it clear that no single factor in this seven-part test is decisive. This effectively means that each of the considerations listed above has to be taken into consideration in evaluating  "whether an intern or student is an employee under the FLSA{ and that} necessarily depends on the unique circumstances in each case." To this end, employers would be wise when hiring interns to define the parameters of the internship in writing and should further consider putting in writing an agreement with the intern reflecting the unpaid nature of the relationship. If you are a business and you hire interns to work at your company, please be sure to call the Katz Law Group to ensure that your business is now complying fully with updated federal regulations.

About the Author

David Katz

Attorney David S.Katz is the founder and managing partner of the Katz Law Group, P.C., located in Marlborough, Massachusetts...

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