Summer Work – Unpaid Internships and Child Labor Regulations; Harassment Training Available

MANAGEMENT INFORMATION RELEASE

FROM:           Sloan, Montgomery, Gregory & Hall, Inc

SUBJECTS:  Summer Work – Unpaid Internships and Child Labor Regulations;

                        Harassment Training Available

DATE:            March 1, 2018 

With the end of another school year on the horizon, questions always arise about the use of interns and the impact of child labor regulations on summer employment.

Wage and Hour Updates Requirements for Unpaid Interns

Earlier this year, the Wage and Hour Division adopted new guidelines to be used when determining whether an intern should be considered a paid employee subject to the federal minimum wage and overtime requirements. These changes incorporate the “primary beneficiary” test and the “economic reality” standard used by several courts and reflect the criteria that should be satisfied in order to properly classify an internship as unpaid.

  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.
  1. 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.
  2. 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.

Courts have described the “primary beneficiary test” as a flexible test, and no single factor is determinative. Accordingly, whether an intern or student is an employee under the FLSA necessarily depends on the unique circumstances of each case.

Previously, the guidelines included a provision that “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.” As a result, almost any scenario where an intern performed productive work for a company made the internship compensable. The new regulations seem to take more of a realistic work perspective.

As before, unpaid internships for public sector and non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible.

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Child Labor Regulations

As high school students start looking for summer jobs, keep in mind that there are strict rules in place for employees under the age of 18 and even more for those under 16. Below is a link to a summary of these regulations:

https://www.dol.gov/whd/regs/compliance/whdfs43.pdf

The most common violations involve driving and the use of power driven machinery. Do not hesitate to contact Sloan Montgomery to discuss the specifics of any positions as the fines are significant and are typically assessed on the first violation without prior warning. For 2018, the maximum civil money penalty for a child labor violation is $12,529, and if the violation results in injury or death, the maximum penalty is $56,947.

Harassment Training Available

There seems to be no end in sight for allegations of sexual harassment against entertainers, politicians, business leaders and other public figures. Accordingly, many clients have contacted us since the beginning of the year regarding harassment and discrimination training for employees and managers. EEOC guidelines and numerous federal court decisions effectively require employers to take proactive steps to provide a workplace that is not conducive to harassment and discrimination against employees on the basis of race, gender, national origin, religion, sexual orientation, age, disability, etc. This does not mean that every act of potential harassment or discrimination must be prevented. Instead, it creates an expectation that employers will put policies and procedures in place demonstrating that these issues are taken seriously by the company. There is no question that employers who provide periodic training to managers and awareness training to all other employees will be in a better position to defend the company should an incident occur.

The consultants at Sloan Montgomery have been providing this training to clients for years. Contact our office for additional details and to obtain a quote on this service, which will be based on the number of sessions and locations involved.

If you have questions regarding the topics covered in this Information Release, you may contact our firm, Sloan, Montgomery, Gregory & Hall, Inc., at (803) 782-9246.

This bulletin is provided as a service to clients and is only to give information of a general nature. It is not intended as, nor should it be considered, legal advice or opinion.

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