DOL Ditches Prior Intern Test in Favor of More Company-Friendly Test

600px-US-DeptOfLabor-Seal_svgLast week, the Department of Labor (DOL) issued a news release stating that going forward, it will use the seven-factor “primary beneficiary” test — set forth by the 2nd Circuit and applied by other Circuits — to determine whether interns working at for-profit employers are employees under the Fair Labor Standards Act (FLSA), expressly rejecting its previous test from 2010.

The “primary beneficiary” test that will now be applied by the DOL analyses the following seven, non-exhaustive factors:

  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.

The DOL noted that this new test will be applied in a “flexible” manner, and that whether an intern qualifies as an employee under the FLSA depends on the unique circumstances of each case.

It is widely agreed that the primary beneficiary test is easier for companies to satisfy than the DOL’s prior test, but it’s too early to tell how much of an impact this change will be. If you do have an internship program, it’s a great time to review intern classifications and make sure that they are being treated properly under employment laws.

 

 

DOL Releases Final Rule On Paid Sick Leave For Employees Of Federal Contractors

600px-US-DeptOfLabor-Seal_svgOn September 29th, the Department of Labor released its final rule requiring federal contractors to provide their employees with at least 1 hour of paid sick leave for every 30 hours of work, up to a maximum of 56 hours (7 days) per year.

The rule officially implements President Obama’s 2015 executive order. Once formally published in the Federal Register (which is expected to happen in the next few days), the rule will go into effect 60 days after publication. Federal contractors should take note and ensure compliance with this rule.

 

 

Challenges to DOL’s New Overtime Pay Rules Continue

houseLogoPrintCongress has joined the fight in trying to stop or delay the Department of Labor’s new overtime regulations. This week, the U.S. House of Representatives voted 246 to 177 to delay the effective date of the DOL’s overtime rule by six months until June 1, 2017. This bill faces an uphill battle — first having to pass the Senate and then a very likely Presidential veto.

Given that the bill is unlikely to become law, and given the questionable future of pending court challenges, employers should continue to prepare for the new regulations to be effective on December 1st.  We will continue to monitor these challenges and keep you apprised.

States and Business Groups File Suit Challenging DOL’s New Overtime Regulations

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This week, 21 states and over 50 business groups filed suit in the Eastern District of Texas challenging the Department of Labor’s new overtime regulations, arguing that the DOL overstepped its authority in establishing the new minimum salary level and the automatic increases to the minimum salary every 3 years.
The new regulations (which,as we have previously discussed, more than double the minimum salary requirement for employees to be eligible for the administrative, professional and executive overtime exemptions) have been hotly contested — in Congress and now in the courts.  But it is far from clear that any of the efforts to delay or stop the new standards will be effective.
We will continue to monitor these challenges and keep you apprised. However, unless and until a challenge is successful, employers should plan to be ready for the new regulations on December 1st.