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Total Articles: 66

Intern or Employee? When “Take Your Children to Work” Day Backfires

In late April each year, tens of millions of employees and millions of employers participate in Take Your Sons and Daughters to Work Day

New York District Court Decision Provides New Guidance on the Second Circuit's Intern-Employee Test

Executive Summary: A recent Southern District of New York opinion brings clarity to the Second Circuit’s new intern-employee “primary beneficiary” test. The court in Wang v. Hearst Corporation (Aug. 24, 2016), held that unpaid interns working at magazines owned by a media company were not “employees” for purposes of the Fair Labor Standards Act and granted summary judgment in favor of the media company.

Indiana Court Rejects Claim that Scholar-Athletes Are Employees under FLSA

Last week, an Indiana federal court dismissed a lawsuit brought by former University of Pennsylvania (“Penn”) athletes against the National Collegiate Athletic Association (“NCAA”) and a number of its member schools over their alleged employment status and corresponding minimum wage protection under the FLSA. Berger, et al. v. NCAA, et al., S.D. Ind., No. 1:14-CV-01710, 2016 U.S. Dist. LEXIS 18194, Feb. 16, 2016. In Berger, the Named Plaintiffs pursued a nationwide collective action against not only their own alma mater, but also more than 120 schools they never attended. Plaintiffs’ alleged in their Amended Complaint that, by virtue of their participation on Penn’s track and field team, they became employees of Penn for purposes of the FLSA entitled to be paid at least minimum wage for the “work” they performed as student athletes. The Court did not agree.

A New And More Flexible Approach To Internship Programs

Class action lawsuits filed by interns who claim they should be classified as employees have proliferated over the last few years. In these types of cases, a large number of interns have argued that they were actually entitled to be paid wages under federal and state laws.

2nd Circuit Amends Unpaid-Internship Opinion

Readers will recall that, last July, the Second Circuit U.S. Court of Appeals (with jurisdiction over Connecticut, New York, and Vermont) adopted a "primary benefit" framework for determining whether a for-profit entity's unpaid intern is or is not an "employee" for purposes of the federal Fair Labor Standards Act.

Resource Update - Navigating the "Shadow Workforce" of Interns, Volunteers, Independent Contractors and Temporary Workers

With the recently published interpretation from the Department of Labor regarding who is considered an employee for the purposes of the Fair Labor Standards Act (and the DOL's ominous pronouncement that "most workers are employees") the shadow workforce of interns, volunteers, independent contractors and temporary workers has become even murkier. FordHarrison has prepared a Wage and Hour Toolkit, Shadow Workforce: Blurred Lines Can Lead to Real Wage Hour Liability, to help employers navigate this shifting and often perilous landscape. The Toolkit also provides best practices to help employers light a path through the dark to avoid wage and hour liability in these areas.

Is the Six-Factor Test Still Good? Eleventh Circuit Endorses Modified Intern Test

A recent decision by the Eleventh Circuit Court of Appeals appears to reject the U.S. Department of Labor’s oft-recited six-factor test, which is used to determine whether interns are actually functioning as employees. In Schumann v. Collier Anesthesia, P.A., et al, No. 14-13169 (September 11, 2015), instead of the six-factor test, the court endorsed a primary beneficiary test designed to account for the economic realities of modern-day internships for academic credit and professional certification.

Federal Appeals Court Rejects Payments To College Athletes

This morning, the 9th Circuit Court of Appeals ruled that the NCAA is subject to antitrust laws and that its payment rules are too restrictive in attempting to maintain amateurism. However, in what can only be deemed a victory for the NCAA, the court also ruled that antitrust law requires only that the NCAA permit its schools to provide up to the cost of attendance to their student-athletes, and nothing beyond that (O’Bannon v. NCAA).

Another Court Adopts "Primary Beneficiary" Internship Analysis

We reported in July that the Second Circuit U.S. Court of Appeals (with jurisdiction over Connecticut, New York, and Vermont) laid out seven non-exhaustive factors as part of a "primary beneficiary" analysis for evaluating whether unpaid interns are "employees" for purposes of the federal Fair Labor Standards Act. In so doing, the Second Circuit refused to follow the test urged by the U.S. Department of Labor.

11th Circuit "Tweaks" Test For Whether Interns Are Employees

If you are a regular reader of this blog, you are probably familiar with the six-factor test that the U.S. Department of Labor uses to determine whether an intern should be considered an employee for purposes of the Fair Labor Standards Act.

eLABORate: Federal Appeals Courts Reconsider Whether Student Interns Are "Employees" Under the Fair Labor Standards Act

On September 11, the U.S. Court of Appeals for the Eleventh Circuit issued a decision which is likely the most recent development of the law surrounding whether student interns or trainees should be considered “employees” under the Fair Labor Standards Act (“FLSA”).

Eleventh Circuit Adopts Second Circuit’s “Primary Beneficiary” Test to Determine Compensability of Internships

The Court of Appeals for the Eleventh Circuit last week adopted the Second Circuit’s “primary beneficiary” test as the appropriate test for determining whether an unpaid clinical intern was truly an “employee” within the meaning of the FLSA. Schumann v. Collier Anesthesia, P.A., 2015 U.S. App. LEXIS 16194 (11th Cir. 2015).

"Yelping" Does Not Entitle You To Minimum Wage

Another Court has joined those holding providers of content to online portals are not employees within the meaning of wage-and-hour laws. Joining a decision from the Court of Appeals for the Second Circuit, which rejected a claim brought by Huffington Post bloggers several years ago, Judge Richard Seeborg of the Northern District of California has rejected the FLSA complaint of individuals who claimed they were employees based on their writing of reviews contained on popular local restaurant review service Yelp. Jeung v. Yelp, Inc., 2015 U.S. Dist. LEXIS 107427 (N.D. Cal. Aug. 13, 2015).

Second Circuit: MLB “Fanfest” Properly Treated as Exempt Recreational Establishment

Last year, Judge John G. Koeltl of the Southern District of New York ruled that individuals who served as volunteers at the 2013 Major League Baseball All Star Weekend FanFest, a four-day event centered around the All Star Game, were not entitled to minimum wage because they were “employed by an establishment which is an amusement or recreational establishment . . . [which did] not operate for more than seven months in any calendar year.” On Friday, the Court of Appeals for the Second Circuit affirmed that decision.

'Primary Beneficiary' Test Determines Employee Status of Unpaid Interns, Federal Appeals Court Rules

How should an employer determine whether unpaid interns at a for-profit employer are employees under the Fair Labor Standards Act entitled to compensation for services provided?

Second Circuit Adopts New 'Primary Beneficiary Test' for Determining Whether Unpaid Interns Are Employees

A recent wave of multimillion-dollar lawsuits brought against employers by unpaid interns demanding compensation for their work has resulted in settlements but no definitive word from the federal courts on when interns should be considered employees. Despite the volume of litigation in this area, the factors that federal district courts have considered to determine whether an intern must be paid have varied, leaving the issue unsettled — until this month, when the U.S. Court of Appeals for the Second Circuit ruled on the issue. On July 2, 2015, the Second Circuit in Glatt v. Fox Searchlight Pictures held that a new test — the “primary beneficiary test” — should be used to determine whether an intern must be considered an employee and thus paid.

Second Circuit Announces New Test For Intern Claims and Puts the Brakes on Class and Collective Claims by Interns

On July 2, 2015, the U.S. Court of Appeals for the Second Circuit issued two eagerly awaited decisions that may dampen the recent wave of collective and class actions filed by unpaid interns claiming they should be paid employees. In Glatt v. Fox Searchlight Pictures, Inc. et al., Nos. 13-4478 & 13?4481 (2d Cir. 2015) and Wang v. Hearst Corp., No. 13?4480?cv (2d Cir. 2015) (summary order), the court announced a new “primary beneficiary test,” identified seven non-exhaustive factors relevant to classifying interns as employees in the for-profit sector, and rejected strict application of the six factor test promulgated by the United States Department of Labor (DOL). Equally noteworthy, the court largely foreclosed collective and class certification in intern cases by emphasizing the highly individualized inquiry required by its new test.

A New Internship Standard—The Second Circuit’s Seven-Factor Test and What it Means for Your Company

On July 2, 2015, the Second Circuit Court of Appeals issued a decision regarding the employment status of unpaid interns that should prove helpful to employers. In Glatt v. Fox Searchlight Pictures, Inc., Nos. 13-4478 and 13-4481, the Second Circuit overturned a decision by the U.S. District Court for the Southern District of New York, which had granted partial summary judgment holding that two unpaid interns were employees subject to the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The lower court also granted class and conditional collective action certification of putative classes of unpaid interns.

Court Adopts "Primary Benefit" Unpaid-Intern Analysis

We have been following developments in Glatt v. Fox Searchlight Pictures since former unpaid interns filed the lawsuit in 2011 seeking (among other things) back-wages under the federal Fair Labor Standards Act. In June 2013, the lower federal court ruled that at least two of the unpaid interns should have been deemed "employees" for purposes of the FLSA's requirements.

2nd Circuit Adopts Employer-Friendly Standard for Unpaid Internships

Establishing an unpaid internship program has become less risky for employers in New York, Connecticut and Vermont in the wake of a new appeals court ruling.

Changes in the Legal Landscape regarding Interns

To pay or not to pay? For several years now, that question has vexed employers large and small, for-profit and not-for-profit, when deciding how and whether to compensate the individuals participating in their internship programs. What had once been a source of inexpensive and, in many cases, free labor turned into an arrangement more risky than rewarding, as a spate of wage-and-hour class actions were filed on behalf of interns across the country. Now, another issue is coming to the forefront as a number of jurisdictions, including both New York State and New York City, are extending equal employment opportunity protections to interns as well.

Is Your Volunteer Really an Employee? The Answer Might Surprise You [Part 2]

In our last post, we looked at the rules governing volunteers at for-profit entities. As we discussed, for-profit organizations have almost no latitude to accept volunteer services. However, nonprofit employers face a more relaxed regulatory scheme under the FLSA when it comes to volunteers. Unlike their for-profit brethren, nonprofit employers can accept volunteer services without running afoul of the FLSA’s minimum wage and overtime requirements. The FLSA regulations contain an exception for individuals who undertake volunteer activities for their own “personal, civic, charitable, humanitarian, religious, or public service reasons.”

Is Your Volunteer Really an Employee? The Answer Might Surprise You [Part 1]

Over the past year or so, we have discussed the Fair Labor Standards Act’s application to both paid interns and unpaid interns, as well as independent contractors. One area we have covered briefly in the past, but not explored in depth, is the issue of volunteers. If you have been reading along, you know by now that if an individual is an employee (as opposed to a properly classified unpaid intern or independent contractor, for example), he or she cannot waive the protections of the FLSA. In other words, unless the employee is subject to an exemption, an employer must pay the employee at least the minimum wage for all hours worked, plus an overtime premium for all hours worked over forty in a week. State laws, too, provide similar requirements. But what about volunteers? Many nonprofit organizations, public agencies, schools, churches, and other similar entities would cease to exist, or at least be severely crippled, if not for the contributions and involvement of volunteers. Can an individual volunteer their services? The answer might surprise you.

Yes, Employers Can Still Have Unpaid Interns (Under the Right Circumstances)

In the past, we’ve explained the DOL’s test for whether employers must pay their interns. Put simply, public employers and qualifying not-for-profit entities do not have to pay their interns. I hope that our more recent discussions of lawsuits that demonstrate the ever-narrowing segment of lawful unpaid internships have spurred some discussions and re-examination among readers of this blog who have internship programs. Judging by some of the calls and e-mails we have received since then, employers have begun seriously considering whether those unpaid internships are really free labor. However, hope is not lost—it is still possible to have unpaid interns under the right circumstances, as one recent New Jersey case demonstrated.

When Free Is Too Good To Be True: Rethinking Interns And Volunteers Under Wage & Hour Laws

Educational institutions of all kinds often utilize the services of volunteers or so-called interns to assist with coaching sports or other extracurricular activities, and to participate in programs that are mutually beneficial. But the United States Labor Department (DOL) has issued clear guidance with respect to unpaid internships and the circumstances under which an educational institution’s current staff may be converted to volunteers, or others may serve as volunteers for certain purposes.

Department of Labor Brief Provides More Guidance on Interns

In the past, we’ve explained the DOL’s test for whether employers must pay their interns. Put simply, public employers and qualifying not-for-profit entities do not have to pay their interns.

USDOL Brief Elaborates Upon "Intern" Views

We wrote some time ago about a lower federal court's determination in Glatt v. Fox Searchlight Pictures that at least two unpaid interns were "employees" for federal Fair Labor Standards Act purposes.

No More Working for Peanuts: The State of the Intern

They’re fetching coffee for movie studio executives, or handling millions of dollars’ worth of rare art and antiques. Some are writing stories for major magazines and newspapers. Quite a few can be found working in the White House.

Students in Clinical Training Program Were Not Employees Under the FLSA

A federal trial court in Florida recently issued a significant decision on the issue of unpaid trainees under the FLSA, finding that 25 former students of Wolford College were not employees when they participated in a clinical training program as part of the college's Masters of Nurse Anesthesia program.

Attempted Class Action Provides Timely Reminder for Employers to Treat Interns as … Interns

With the summer drawing near and many high school and college students looking to bolster their resumes, a new set of eager-to-please interns will appear in offices around the country, bringing some youthful exuberance to the office. For most, the addition of interns roaming the halls will be a positive experience for all involved. For others, however, in particular employers who may view interns as little more than “free labor,” costly litigation could be lurking right around the corner.

The Boys of Summer: Interns, Seasonal Workers and More

Memorial Day weekend has passed, the Major League Baseball season is in full swing, and summer is upon us. With apologies to Roger Kahn, for us wage and hour practitioners, the “Boys of Summer” (and girls!) are the wave of workers joining employer workforces for the next few months. Whether they are interns in your office, lifeguards at your pools and beaches, or the thousands of seasonal hospitality and service workers joining payrolls, if you are adding staff this summer, it’s time for our annual summer reminders.

Resource Update - Navigating the "Shadow Workforce" of Interns, Volunteers, Independent Contractors and Temporary Workers

Summer is approaching and with it comes the end of the school year and a new crop of students hoping to gain experience in their chosen careers by working as interns or trainees. Additionally, non-profit organizations often see an increase in volunteers during the summer break. These opportunities can be valuable for both the companies and the individuals involved, but companies must carefully delineate the responsibilities of trainee and volunteer positions and classify workers appropriately. Failure to do so can result in unanticipated liability under federal and state wage and hour laws, as demonstrated by recent high-profile cases involving interns.

Major League Baseball Volunteers Are not Employees Under the FLSA

On March 26, 2014, the District Court for the Southern District of New York dismissed John Chen’s proposed Fair Labor Standards Act (FLSA) collective action against Major League Baseball (MLB) alleging that MLB had failed to pay him and all other All-Star Week FanFest volunteers the minimum wage. In Chen v. Major League Baseball, et al., the court held that volunteers, who had worked at MLB’s FanFest experience at the Jacob Javits Convention Center in New York City, were not entitled to minimum wage because the FLSA exempts from its minimum wage provisions individuals who perform services for an “amusement or recreational establishment.”

Campus "Unpaid Intern" Opposition Growing

We have already reported that a group calling itself the "Fair Pay Campaign" aims to pressure colleges and universities not to facilitate unpaid internships or even post notices about them. This initiative appears to be gaining momentum.

School-Facilitated Internships: No Worries, Right?

We have long warned that one should not simply assume that an internship associated with or sponsored by an educational institution falls outside of the federal Fair Labor Standards Act's requirements. Our caution includes situations in which the intern receives academic credit for the time so spent.

Should The White House Be Paying Its Interns?

The unpaid-interns ruckus continues to unfold, this time in a way that entangles President Obama.

Intern Lawsuits (Continued): Another Big Settlement

As was anticipated in light of the intensified focus upon internships over three years ago, the next stage was a spate of high-profile lawsuits by unpaid or allegedly-underpaid interns under the federal Fair Labor Standards Act and/or state wage-hour laws. One of them was filed last May against Elite Model Management Corporation under the FLSA and similar New York state laws.

Internships Might Be Vanishing

We have observed for some time that the spate of wage-hour lawsuits might be expected drastically to curtail the availability of internships of both the unpaid and paid varieties

Group Advocates Pay For White House Interns

The unpaid-interns ruckus continues to unfold, this time in a way that entangles President Obama.

Be Careful With Unpaid Interns: The Six-Factor Checklist You Need

With the abundance of college graduates scrambling for too few paid jobs, many employers are nabbing them for unpaid internships—hoping to keep this talent until paid positions become available. But employers need to be careful with this approach so as not to run afoul of the federal minimum wage and overtime law.

"Black Swan" Ruling Forces Closer Look At Unpaid Interns

Unpaid summer internships are routine for some businesses, especially those in creative fields such advertising, design, music, publishing and film – all areas that have flourished locally in recent years.

Do You Have to Pay Summer Interns?

Summer has arrived and many employers have already supplemented their operations with student interns, but the question we see crop up repeatedly is, “do I have to pay interns?” In the last few years, with a more competitive job market and corporate focus on reducing costs, we have seen an increase in the use of unpaid interns. Unfortunately, not all internships can be unpaid.

Still Willing To Have Unpaid Interns?

We have repeatedly cautioned that employers who are prepared to take on unpaid interns should enter into these arrangements with their eyes fully open. New developments emphasize this yet again.

"Let's Hire An Unpaid Intern," Often A Bad Idea

We’ve warned clients for some time now that businesses and other organizations should think carefully if they are considering the possibility of permitting unpaid internships. What might be described as the internship “season” is fast-approaching, so the time to consider whether and under what circumstances to get involved in these relationships is now.

To Pay or Not to Pay? The Test for the Unpaid Intern

As the end of another academic year approaches, college students across the country are seeking summer employment opportunities. As a result, your organization may soon be faced with the question of whether to hire summer interns. Sure, you could use the extra hands to help out – but do you really have to pay them? After all, the company would be providing an invaluable learning experience and on-the-job training to high school and college students, while receiving little back in “corporate gains.” But before you start employing “free” labor, it is important to understand what the U.S. Department of Labor (DOL) has to say about for-profit employers paying their interns.

Even Paid Internship Programs Come With Risk

There was a significant increase in the number of class actions in 2012 brought by former interns, many of whom were in unpaid positions working in the business sector. But recently the educational community received a wake-up call when Hamilton College was hit with a class action involving its paid interns.

Is There An Intern In Your Future?

There was a significant increase in the number of class-action lawsuits in 2012 brought by former interns, many of whom were in unpaid positions working in the business sector. But recently the educational community received a wake-up call when Hamilton College was hit with a class-action lawsuit involving its paid interns.

Risks Of "Internship" Claims And Liability Still Increasing

We have warned for some time now that businesses and other organizations should think carefully if they are considering the possibility of permitting unpaid internships. What might be described as the internship "season" is fast-approaching, so the time to consider whether and under what circumstances to get involved in these relationships is now.

REMINDER: Holiday "Volunteer" Services Might Be FLSA Employment

Volunteerism is again on the upswing as the holiday season enters its most-intense period. Businesses and other organizations should reacquaint themselves with the principles summarized in our November 2011 post cautioning that some "volunteers" or "volunteer" activities might be subject to the requirements of the FLSA.

FLSA Intern Class Conditionally Certified In Hearst Lawsuit

As we reported earlier, a former Harper's Bazaar unpaid intern is pursuing a lawsuit against publisher The Hearst Corporation in which she claims (among other things) to have been an "employee" under the federal Fair Labor Standards Act who was not compensated in compliance with that law.

The Summer Jobs+ Initiative vs. Child Labor Laws

"America's young people face record unemployment, and we need to do everything we can to make sure they've got the opportunity to earn the skills and a work ethic that come with a job. It's important for their future, and for America's…. This is an all-hands-on-deck moment. That's why today, we're launching Summer Jobs+, a joint initiative that challenges business leaders and communities to join my Administration in providing hundreds of thousands of summer jobs for America's youth" -- President Barack Obama

"Volunteers" And Non-Profits: Round Two

A few readers were surprised by our April 3 post's caution that, in some scenarios, a volunteer performing work for a federal Fair Labor Standards Act-covered non-profit organization might be an "employee" subject to that law's compensation requirements.

Are "Volunteers" The Answer For Non-Profits?

A reader of our March 14 post relating to unpaid internships at non-profit organizations asks whether non-profits can avoid the intern debate by offering "volunteer" opportunities to engage in charitable or public-service activities. But this simply changes the nature of the potential problem.

Could Your Unpaid Intern Be More Expensive Than You Thought?

Is your unpaid intern really an employee? If you're relying on the fact that the intern receives college credit, you need to read this.

Unpaid Internships At Non-Profits Or Arranged By Schools

Our earlier post prompted questions about whether federal Fair Labor Standards Act principles are different for unpaid internships at non-profit organizations or for those sponsored by educational institutions for which the intern receives academic credit. The short answer is: No, they are not.

Are Unpaid Internships Worth The Risk?

For awhile now, unpaid internships have been a hot topic under the federal Fair Labor Standards Act. We noted some time ago that the U.S. Labor Department was taking a skeptical view of these relationships.

Intern + Output = Paycheck

It's no secret that today's economy is tough. The result? Business vets are joining this year's crop of students as fall interns. They will work away – often for free – in hopes of a future job, a resumé builder and even to sample "the real world."

Holiday "Volunteer" Services Might Be FLSA Employment

The holiday spirit moves many to volunteer for activities of a benevolent nature. An organization to which such individuals donate services should consider the possibility that they might be "employees" under the federal Fair Labor Standards Act. Getting this wrong could result in liability for back-wages, child-labor penalties, and other remedies.

When are Student Assistants "Employees" Under The FLSA?

Last month, a federal judge in New York granted preliminary approval for a settlement in which Hofstra University agreed to pay up to $485,000 to a class of 256 undergraduate and graduate students who allegedly were not paid minimum wage and overtime in violation of the Fair Labor Standards Act. The plaintiff class included both students who the University classified as hourly employees and others who received stipends as undergraduate and graduate assistants. Because the case was settled, the court never reached a judgement as to whether the students who received stipends were "employees" entitled to minimum wage and overtime under the FLSA. That begs the question, when must a student be considered an "employee" for purposes of minimum wage and overtime?

Client Alert: A Low Cost Option to Voluntarily Reclassify Workers

In September 2011, in the wake of its continuing worker classification audit program, the Internal Revenue Service (IRS) announced the Voluntary Classification Settlement Program (VCSP), a voluntary initiative allowing taxpayers the opportunity to change the prospective classification of their workers at a low cost. Taxpayers seeking to apply to the VCSP for the fourth quarter of 2011 must act quickly to meet the initial deadlines set by the IRS.

Employee Volunteers and Emergency Call-Ins [Webinar Q&A]

Another in our series of answers to questions from our September 28 webinar on wage and hour law in higher education:

"Kitchen Tryouts Start Today" ... Or Maybe Not

Hospitality employers sometimes wonder whether it's possible for individuals to participate in kitchen activities as unpaid interns or on a tryout basis, typically as chefs or cooks. Among the many questions this raises is whether such people would be "employees" who are subject to the federal Fair Labor Standards Act's requirements.

AVOIDING PITFALLS WITH INTERNSHIPS: DOL EXPLAINS WHEN INTERNS MUST BE COMPENSATED (pdf).

In the current job market, more and more employers are receiving requests from applicants for unpaid internships. These offers can be tempting. However, the adage “look before you leap” is especially applicable in this situation, and employers should be cautious before entering an internship relationship.

Internship Programs Face Increased Regulatory Scrutiny.

At this time of year, many firms take on interns, typically undergraduate students who perform a variety of tasks for the company. In many instances, these interns are unpaid or receive only a modest stipend. With the recent economic downturn, more companies than ever are tempted to use unpaid interns to supplement their existing paid workforce.

Wage & Hour Talk Podcast: "Should Your Unpaid Interns Actually Be Paid?"

Franczek Radelet attorneys Katie B. Schreiber and Mark S. Wilkinson discuss wage and hour issues in a brief podcast, which you can hear on our Web site or download to your computer or audio player.

Do Your Internships Comply With Wage-Hour Law?

Internships offer students unparalleled opportunities to gain real world experience and hands-on career development. The practical work experience derived from internships allows students to develop contacts, identify areas of interest, and gain an edge in an increasingly competitive job market.
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