Summer feels really far away right now.  It’s just been brutally cold here in the Northeast.

(How cold? Too cold for skiing.  That’s brutal by any stretch.)

But summer WILL eventually come. So we’re told.

So the news late Friday that the U.S. Department of Labor was scrapping the test it had released just a few years ago about interns probably went a bit unnoticed.

At first blush, it might look like a big deal. But, in reality, not so much because the federal courts here (including New York as well) had already adopted the new test that the USDOL announced on Friday.

I’ve covered both before, but the TL;DR version is this: The DOL is going to the “primary benefit” or “primary beneficiary” standard that had been outlined in 2015 by the Second Circuit.

Law360 summarized it pretty well here:

Under the [Second Circuit] test, courts have analyzed the “economic reality” of interns’ relationship with their employer to determine which party is the primary beneficiary of the relationship. The standard has been applied in various cases where courts have ruled that interns in a variety of industries, as the primary beneficiaries of their internships, don’t qualify as employees for FLSA purposes and can’t collectively pursue claims for misclassification and wage violations under that statute.

That said, employers in Connecticut don’t have it easy. As I noted in a prior post as well, Connecticut passed anti-discrimination law protection for interns that uses another test too.  That law better tracked the old DOL interpretation which has now been overturned.   That said, that law does not apply to wage and hour claims, only discrimination claims.

So, what does it mean? Employers have a tricky time structuring internships to meet both federal and state law guidance. The “primary beneficiary” test is going to carry the day in many instances, but employers that often use interns should still consult their legal counsel to see if there are any particular issues that need to be addressed for your company.

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.

With summer fast approaching, summer internships will start picking up their pace as well.

Fortunately, there are a lot of great resources for employers to learn about how to do internships without violate the law.  I’ll be discussing the legal side of internships on The Proactive Employer podcast that will be broadcast live this Thursday at 3 p.m. ET.

Tweet your questions using the hashtag #TPE or call in at 1-866-472-5790 to talk. The show will be available for on-demand listening at The Proactive Employer website, on the VoiceAmerica Business Channel and via iTunes following the broadcast.   For more information, check out Stephanie Thomas’ blog post here. 

I’ve written about the subject in a prior post last month here.