I’m not talking about the real Independence Day fireworks; rather, it’s a new Second Circuit decision that should have employment lawyers popping this morning.
For a while, we’ve been talking about interns. Indeed, back in 2013, I talked about how a wage/hour case involving interns on the movie “Black Swan” had the potential to change how employers use interns.
In that case, a federal district court judge essentially adopted a six-factor test used by the U.S. Department of Labor to determine if an intern was really an employee.
Flash forward to last Thursday. In somewhat of a surprise, the Second Circuit — which covers cases in Connecticut — reversed that federal district court court’s decision and rejected the DOL’s six-factor approach.
In its place, the court adopted what Jon Hyman properly termed, a “more flexible and nuanced primary-benefit test.”
[T]he proper question is whether the intern or the employer is the primary beneficiary of the relationship. The primary beneficiary test has two salient features. First, it focuses on what the intern receives in exchange for his work.… Second, it also accords courts the flexibility to examine the economic reality as it exists between the intern and the employer.…
In the context of unpaid internships we think a non‐exhaustive set of considerations should include:
1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
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 coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
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 entitlement to a paid job at the conclusion of the internship.…