“I’m Just an Intern!” DOL Changes Course and Adopts Primary Beneficiary Standard for Intern Compensation CasesDetermining when an unpaid intern is really an employee has been a moving target for the last several years. However, on January 5, 2018, the Department of Labor announced that its Wage and Hour Division will now use the “primary beneficiary” test to determine employee status.

What is the primary beneficiary test? This is the standard numerous appellate courts have adopted over the last several years. The DOL’s announcement is a change in policy from the agency’s six-factor test adopted in 2010, which was widely challenged and several times rejected by courts. Most recently, the Ninth Circuit adopted the “primary beneficiary” test instead of the DOL’s position.

This issue has been percolating for several years (we have written about it here and here). Now that the DOL is getting in line with the seven-factor primary beneficiary test, it is worth a refresher on what factors to consider in whether an intern can be unpaid:

  1. Do the intern and employer clearly understand that there is no expectation of compensation for the job?
  2. Does the internship provide training that would be similar to that given in an educational environment?
  3. Is the internship tied to a formal education program with coursework and/or academic credit?
  4. Does the internship fit into the intern’s academic calendar?
  5. Is the length of the internship limited to a period where they are provided with beneficial learning?
  6. Does the intern’s work assist or complement the work of paid employees instead of displacing them?
  7. Does the intern understand that the intern is not automatically entitled to a paid job at the conclusion of the internship?

This change does not make it open season to set up unlimited unpaid internships. Those free interns can still sue you and maybe win, depending on the facts of the case. If you want to use unpaid interns, the best bet is still to set it up through the intern’s school and see about academic credit. If that is not a viable option, the safest course is still to pay interns at least minimum wage and overtime as appropriate.

Happy Thanksgiving and the Many Things for Which We Are ThankfulBefore everyone gets out of the office to their various homes and families to celebrate the holiday, we wanted to review the year and count our blessings. Not only are we thankful that our families and colleagues in our Houston and Tampa offices weathered the storms safely, we are also thankful for the following legal stuff:

1. The DOL is not about to change the wage and hour laws.

Does anyone else remember the panicked calls last Thanksgiving week when the Texas judge put the brakes on a regulation that was going to increase the salary basis test? We are all thankful that will not happen this year. Although we still don’t know what, if anything, will happen on that front we will keep you posted.

2. Finally a court has said the ADA is not about leave.

Despite the EEOC’s insistence otherwise, the Seventh Circuit stepped up to the plate and said extended leave is not a reasonable accommodation under the ADA. As we all know, you still need to consider if a limited amount of leave will get the employee back to work but we are thankful that we have some new case law on this front.

3. Harvey Weinstein doesn’t work for us.

This story has horrified many but given all employers a wake-up call. We are grateful for the opportunity to train more people and try to make America a better place to work.

4. The NLRB has a new direction.

Maybe the new Board won’t tell employees that it is okay to swear at your boss on Facebook or nitpick employer policies quite so much.

5. You’re not going to be the employer of someone else’s employees.

DOL has withdrawn its prior guidance on independent contractor and joint employer liability, and Alabama’s Rep. Byrne has introduced a bill to “Save Our Small Businesses.”

6. Legalized marijuana has made questions about drug policies so much more interesting.

Even though it isn’t legal in many states, the fact that employees can legally ingest marijuana many places (including Florida) and take their chances on the looming random drug screen has spiced up our lives. While the law will continue to develop in this area, we are grateful for the very interesting questions we have received.

7. People other than our mothers read this blog.

(Okay, some of our moms are reading and might boost the numbers a little bit.) Since 2016, we have published more than 130 articles and had more than 230,000 reads, according to aggregate reports from Lexology and JD Supra. We have received recognition in The Expert Institute’s Best Legal Blog 2017 competition, the ABA Journal’s Web 100 Ranking, and numerous quotations in other publications. We enjoy bringing you this information and love it when you tell us it is helpful or tweet it to someone else.

Happy Thanksgiving from the Labor & Employment Insights blog team!

Whatever Happened to Those New Overtime Regulations? DOL May Be Sending a Signal with Its Notice of AppealRemember last year when everyone was getting ready for the big change to the salary threshold for the overtime exemption that was set to go into effect on December 1? And then, seemingly out of nowhere, a judge put a stop to all of those worries? Ever wonder what happened to those pesky regulations? Although we still don’t know what is going to happen, it is worth a look back and a status update.

The Timeline

  • May 23, 2016: The DOL revised the FLSA overtime regulations to more than double the minimum salary a company must pay an employee for that employee to qualify as exempt from overtime status. The revised regulations were set to go into effect on December 1, 2016.
  • November 22, 2016: Judge Amos L. Mazzant, United States District Judge for the Eastern District of Texas, issued a nationwide injunction, enjoining implementation of the revisions.
  • August 31, 2017: Judge Mazzant ruled that the proposed revisions were invalid, finding that the department had exceeded its authority in making them.

The Latest

On October 30, 2017, the DOL Wage and Hour Division announced that the Department of Justice had filed a Notice of Appeal of Judge Mazzant’s ruling. According to the DOL’s statement, once the appeal is docketed, the Department of Justice will file a motion to hold the appeal in abeyance until after the DOL has undertaken “further rulemaking to determine what the salary level should be.”

This announcement indicates that the DOL is in the process of modifying the revisions — potentially rendering the appeal moot — however, it needs more time to do so. As noted in the October 30 statement, the DOL is currently reviewing the submissions to a Request for Information that went out in July 2017. Given the tenor of the current administration, I suspect any new revisions will be more business-friendly than the invalid 2016 revisions. Only time will tell.