Do you remember your first day at work?

I’m not just talking about a new job.

I mean your first day EVER at a workplace.

For my oldest daughter, today is that day.

She starts as an intern at a local manufacturer of “Highly Complex Machined Parts and Precision Cams for Aerospace, Medical and Commercial Applications” to help her focus on aerospace engineering.

This internship program started a few years ago from our town’s high school and gives students a chance to see the workplace from the inside, all under the supervision of an internship program.

When she came home earlier this week from an “interview” (which I think was more of a guided tour, truth be told), the excitement from her was palpable.

“The machines are so….cool!”

When asked to explain, she said, well, it was just “cool”.  She had a huge smile and couldn’t wait for today to come.   She loves engineering (we’re starting on college applications this fall!) and the chance to have her work at a place where engineering is at its core is pretty, well,  “cool”.

Of course, like any good father (who is also an employment lawyer), I talked to her about some workplace notions — she needed to be on time, to be helpful, and to work hard.

And I told her that she had a right to be treated fairly, to be free of harassment (not that I had any notions that is going to happen here), and that the internship program was intended as a learning tool (and thus ask questions).

Of course, I could’ve pointed her to prior blog posts on internships here, here and here but that would just be asking for the classic teenage eye roll.

I’m wise enough to know that someday she’ll have a tough day at a job.

But I hope she remembers the excitement of Day One.

Because it’s really “cool”.

IMG_7496 (2)Did you enjoy the fireworks last week?

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.…

Continue Reading DOL’s Internship Test Rejected by Second Circuit Creating Conflict with New Connecticut Law

Malloy Signs Intern Anti-Discrimination Bill
Malloy Signs Intern Anti-Discrimination Bill

Capitol Watch — The Hartford Courant’s political site – tweeted the following yesterday:

And a review of the Governor’s website reflects that approval in the bill notification release. (I read them so you don’t have to!)

So, what does that mean for employers? Well, I’ve covered the bill before so I won’t recap everything here.

But the bill’s provisions now become effective October 1, 2015.  Thus, employers who regularly use interns should update their employee handbook and anti-harassment provisions to explicitly cover interns.

One of the other things to consider that hasn’t been discussed much is the extent to which the bill’s definition of “intern” may get adopted in the context of establishing whether an intern is really an “employee” for wage/hour purposes.

What do I mean? Well, back in 2012, I talked a lot about how employers could properly structure internship programs. In that post, I noted that there were six factors that the U.S. Department of Labor would look at:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Now, let’s compare this with the definition of “Intern” in the new anti-discrimination bill.  An intern is defined as an “individual who performs work for an employer for the purpose of training, provided”:

  1. the employer is not committed to hire the individual performing the work at the conclusion of the training period;
  2. the employer and the individual performing the work agree that the individual performing the work is not entitled to wages for the work performed; and
  3. the work performed:
    1. supplements training given in an educational environment that may enhance the employability of the individual,
    2. provides experience for the benefit of the individual,
    3. does not displace any employee of the employer,
    4. is performed under the supervision of the employer or an employee of the employer, and
    5. provides no immediate advantage to the employer providing the training and may occasionally impede the operations of the employer.

If you track each item carefully, you’ll notice that they are actually fairly similar. That’s a good thing.  While there are subtle differences, it’s unlikely that those differences will be meaningful in their application.

As a practical matter, that means employers that adopt the defintiion of “intern” in the new state statute are likely to be following the federal interpretation as well, reducing the risk of a wage/hour claim as well.

The bottom line, however, is that employers who just use interns without much worry as to the liability that using interns may create should rethink their practices. The new law is yet another area where new rules will make using those interns may expose employers to possible claims.  Is it a small risk? Perhaps. But small risks can turn into big ones if employers aren’t mindful.

These are not the interns you are seeking
These are not the interns you are seeking

Believe it or not, harassment against summer interns isn’t directly prohibited under Connecticut law.  (But treating them like employees without paying them is against the law.)

This is not, however, a column about the best ways to harass your interns.  Indeed, regardless of the law, it’s bad in so many ways.  (And the CHRO has taken the position — yet to be tested in courts — that interns are already covered.)

But all that is about to change. Earlier this week, the Connecticut General Assembly passed legislation (Senate Bill 428) that would make it illegal to do so and allow those interns to file claims not only with the Connecticut Commission on Human Rights & Opportunities but ultimately in Superior Court too.

The bill, which awaits the Governor’s signature, would go into effect October 1, 2015 and has several important aspects that employers should be aware of now.  The bill follows a trend in California, New York, and other states to protect interns more explicitly under the law.

So, who IS an intern?

An intern is defined as someone who performs work for an employer for the purpose of training, provided:

  1. the employer is not committed to hire the person performing the work at the conclusion of the training period;
  2. the employer and the person performing the work agree that the person performing the work is not entitled to wages for the work performed; and
  3. the work performed meets five conditions.

Those five conditions are that the work:

  • supplements training given in an educational environment that may enhance the employability of the person;
  • provides experience for the benefit of the person;
  • does not displace any employee of the employer;
  • is performed under the supervision of the employer or an employee of the employer; and
  • provides no immediate advantage to the employer providing the training and may occasionally impede the operations of the employer; and

If you’ve seen some or most of these factors before, that’s because the U.S. Department of Labor has outlined something similar in its definition of interns.

And what exactly is prohibited?

Well, for most part, the things that are prohibited against employees are prohibited against interns.

For example, the bill prohibits discrimination based on an intern’s race, color, religious creed, age, sex, gender identity or expression, sexual orientation, marital status, national origin, ancestry, present or past history of mental disability, intellectual disability, learning disability or physical disability, including, but not limited to, blindness. The bill’s prohibition covers hiring, firing, and advertising internships.

It also prohibits sexual harassment against interns.

The bill also bans an employer from retaliating against an intern for filing a complaint or testifying in a proceeding about a discrimination complaint.

For employers, this new law (when signed by the governor) should lead to a few steps being taken:

1) Amend your policies and procedures to cover interns. That includes your anti-harassment policies.

2) Educate your managers and your interns on what is appropriate in the workplace.  It is particularly important for the interns who may have had little workplace experiences before this.

3) If you have insurance, ask your insurer whether it will cover claims made by interns (who are not, by the way, defined as employees).

4) Consider the risk factors of continuing an internship program.  If these interns can now bring suit against your company, I have no doubt that some companies may say that the risk is too high.

There are still unanswered questions about this. If an unpaid intern gets “fired”, what are his or her damages? There is no back pay so then what? Reinstatement? And if the employer has the right not to hire the person after the training period, then what?

Fortunately, this bill seems to be in search of a problem that doesn’t seem particularly rampant.  In the testimony in support of the bill, not a single example of intern discrimination or harassment was identified, even by the Connecticut Commission on Human Rights & Opportunities.

That said, stay tuned for more as the particulars of this bill get incorporated into everyday practice.

 

While the temperatures this morning didn’t feel much like summer, the season is upon us. And be honest — when you think of summer do you think a) hot dogs or b) wage & hour issues for interns? If you answered b), you probably need some help.  Which is why my colleague Jarad Lucan has drafted this timely post to remind us all about the rules of the road for interns.

While we have discussed the rules on unpaid interns in the past, it seems that every summer a court gives employers a reason to review their internship programs to make sure that they comply with the requirements of the Fair Labor Standards Act (FLSA).

Recently, a federal judge in the Southern District of New York granted a conditional certification of a possible nation-wide class action involving current and former unpaid interns of Warner Music Group.

Essentially, the interns claim they were entitled to the minimum wages and overtime because they performed similar work as actual employees, did not receive academic credit, and Warner derived a direct benefit from their work.

In order to assist employers with designing a valid unpaid internship program, the Department of Labor (DOL) has outlined six factors to determine whether an intern is exempt from wage an hour laws.  We’ve touched on them before but they are worth repeating here:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

But, in plain English, what do these factors really mean?

Put simply, the first two factors mean that the primary purpose of your internship program must be for the intern to learn, with performing work being only secondary.

The third, fifth, and six factors mean that your internship program should clearly set out which current employee will oversee the intern, and that the intern will not be offered a job following completion of the program.

The fourth factor means that the intern is essentially getting in the way of your operations. As a reminder, all six factors must be met for your unpaid internship program to pass scrutiny.

No doubt hiring unpaid interns is now a risky endeavor. If you have some this summer, make sure that they meet the DOL’s guidance on the subject.  Once you’ve done so, you can enjoy the summer.

Last week, a federal judge in New York ruled that unpaid interns on the movie “Black Swan” should have been paid for their work, under the Fair Labor Standards Act (FLSA).

You can download the decision in Glatt v. Fox Searchlight here.  The court relied on the six factors that have been outlined by the U.S. Department of Labor before.

I talked about these factors in a 2012 post and they are worth reviewing again:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Put another way, if you’re bringing on unpaid interns to do work in place of regular employees, it’s probably not going to fly.

While the mainstream press is professing some shock at the decision, most employment lawyers saw this as inevitable. As one blogger, Philip Miles, stated, it’s just “difficult for unpaid internships to be FLSA-compliant”.

Or, as Jon Hyman from the Ohio Employer’s Law Blog stated:

Employers that use unpaid interns should pay careful attention to this issue. It is far better to scrutinize interns under the DOL’s six factors before the agency, or a group of plaintiffs, swoop in and do it for you. It is even better to formalize the relationship in a written internship agreement that formally spells out how each of these six questions is answered in your favor. Or maybe it is best simply to assume that except in rare cases, there is no such animal as an “unpaid intern,” and you should simply accept the fact that if you are going to label entry-level employees as interns, you need to pay them for their services.

Is this decision good or bad? Suzanne Lucas (otherwise known as the “Evil HR Lady”) writes this morning in Inc. that ultimately the decision will only hurt college students, not help them:

Why? We already know that college is expensive, and that having a degree does not guarantee a job. We also know that your best chance of getting a job after getting that shiny new degree is if you have a slew of internships on your resume. Without those, you don’t stand out. It’s hard to convince a hiring manager that you are ready to be a financial analyst with a transcript and three summers working fast food. They want someone who has experience.

Internships have been the way people gained experience. Companies were willing to take on interns as a sort of community service as well as the ability to get some of grunt work done for free. Though the latter has been illegal for a very long time, it’s mostly ignored. Now, it can’t be.

More companies will be paying for their interns: It sounds good on its face. But it also means that some companies, particularly small ones, will just skip the interns altogether. If they have to pay, then why hire someone completely inexperienced who will only be there for three months anyway? Why not hire a real person who has experience and will stick around past the training phase? Which means the number of internships available will drop.

What the decision should remind companies yet again is that unpaid internships are a risky endeavor.  If you have some this summer, make sure that they meet the DOL’s guidance on the subject.

Back in 2010, at the same time the U.S. Department of Labor was making a big publicity push on its interpretation of rules regarding unpaid interns, the New York Times ran piece noting how employers were skirting the law when it came to internships:

The Labor Department says it is cracking down on firms that fail to pay interns properly and expanding efforts to educate companies, colleges and students on the law regarding internships.

“If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law,” said Nancy J. Leppink, the acting director of the department’s wage and hour division.

The biggest problem, according to the article is that the employer should derive “no immediate advantage” from the intern’s activities — “in other words, it’s largely a benevolent contribution to the intern.”  The takeaway from this article, as I said back in 2010 is that employers should not use interns to do real work. 

Flash-forward to 2012. The New York Times over the weekend ran another piece on internships. This time, however, it was critical of employers who only assigned the interns menial tasks.

Although many internships provide valuable experience, some unpaid interns complain that they do menial work and learn little, raising questions about whether these positions violate federal rules governing such programs.

So, within the span of two years, you have two articles on internships: One critical of employers that assign unpaid interns real work and one critical of employers that assign unpaid interns menial work.

What’s an employer to do?  

Well, I talked quite a bit about this on Thursday on The Proactive Employer radio show and there were really two solutions (you can listen to the entire broadcast below).

First, if you’re going to have interns do real work, you can do so — you just need to pay them minimum wage.  Second, if keeping interns unpaid is important, it’s critical that employers follow six criteria outlined by the U.S. Department of Labor. 

The articles in The New York Times are well-timed to make sure that employers are aware of their obligations.  What I said back in 2010 holds true today: “As the summer season approaches, employers are now on notice that their use of interns is going to be under closer scrutiny than ever before. ”

 

The word “Interns” has turned into a dirty word for employment lawyers lately. But before you panic, it’s time to separate fact from fiction.

Now, it IS true that a few years back, the United States Department of Labor signaled employers that it would start cutting down on the practice that some employers used of hiring unpaid interns to do real work instead of paying employees.  (And yes, I covered THAT too.)

The USDOL released a fact sheet on the subject too at the time. But over the last two years, we just haven’t seen an epidemic of cases about this issue.

That’s not to say that there haven’t been notable cases; but misclassification of employees remains a much larger issue for employers to be concerned about. 

Nevertheless, as employers start to think about their summer plans, it’s important to think about how you structure your internship program.    How so? By reviewing six factors that the USDOL will look at too.

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Here’s a simpler “test”: If you’re bringing on unpaid interns to do work in place of regular employees, it’s probably not going to fly.

An “intern” doesn’t have to be a dirty word.

 

With all the news about recent Supreme Court decisions, here are a few articles that you might of missed over the last few weeks:

 

With the Department of Labor’s crackdown on unpaid interns continuing this year (for background, see my prior post), it seems appropriate to delve into the topic in some more detail.  

Fortunately, I’ve been asked to join The Proactive Employer in a podcast on the topic on Friday morning.  Details and signups are available here. 

So what will we cover in the podcast? In this installment, we’ll be discussing internships, the potential risks of unpaid internships, and how employers can provide internship opportunities while minimizing litigation risk.  The host is Dr. Stephanie Thomas, who the Director of the Equal Employment Advisory and Litigation Support Division(EEA/LS) of MCG International.

In the meantime, if you’re interested in getting started on this issue, take a look at this publication from the Department of Labor, which addresses a whole host of topics.