W2 Issues/Concerns


Blog

Check out our weekly blog posts and see the latest news and discussions happening in the HR world of business.

Labor Department Makes It Easier to Offer Unpaid Internships

Interns are valuable members of your staff as they learn and absorb the knowledge and experience your company offers while they gain real-world experience. Now, the Department of Labor made it easier to hire interns without having to pay them.

In a bulletin released by the DOL’s Wage and Hour Division, the agency announced that it is doing away with its much-criticized six-factor test for determining whether an intern qualifies as an employee who is entitled to earn at least minimum wage, as well as potential overtime payments under the Fair Labor Standards Act (FLSA). Per the terms of the previous guidance, interns had to meet each of the very strict six criteria in order to be considered a true intern and thus be able to work at no cost to employers. However, meeting each of the factors was nearly impossible, meaning that most companies ended up paying their interns.

However, moving forward, the DOL is adopting a primary beneficiary test. This “friendlier” approach is designed to “align with recent case law, eliminate unnecessary confusion among the regulated community, and provide [its] investigators with increased flexibility to holistically analyze internships on a case-by-case basis.” Essentially, the new rules ask employers to consider whether the individual in question would be the primary beneficiary of the internship; if they are not, then the internship must be paid.

In order to determine this status, the DOL fact sheet notes that courts consider the following factors when rendering their decision on the status of the internship:

  • 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.
  • 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.
  • The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  • The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  • The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  • 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.
  • 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.

Now, it should be noted that in order to qualify for an unpaid internship, interns no longer have to meet each of the criteria listed above; instead, the factors are intended to be considered as a collective to help best define the intern/employer relationship and render a payment decision accordingly.

Abel HR can help you set up an intern program at your company while meeting all the new requirements. Ask us how at info@abelhr.com or 800-400-1968.

 

Post a Comment

Your email address will not be published. Required fields are marked *

HR Managers: Discover how to effectively tackle business challenges with a PEO
Small Business: Discover how Abel HR can help your business.

Featured BLOGS

  • Your Employees are the People in the Neighborhood

    Giving back to the community is an important aspect of being a business owner. In addition to encouraging your employees to support local causes, you can also give back in a significant way by supporting your employees who volunteer in the area, such as volunteer firefighters, first aid squad members and others. Did you know that having these employees as part of your business can actually boost your bottom line (and contribute to a more pleasant work environment)? Supporting employees who choose to volunteer can also make you a more attractive employer, opening your business up to a better caliber

  • How is the Cannabis Landscape Affecting HR?

    Thirty-three states and the District of Columbia have taken steps to decriminalize the use of marijuana. While 10 states—Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington—and our nation’s capital have adopted laws legalizing recreational cannabis use, the other states have only loosened the laws to allow for the use of medicinal marijuana (see where your state stands on this interactive map). It should be noted, however, that marijuana use—even for medical purposes—remains illegal at the federal level (and federal laws trump state laws…more on that in a minute). While the data is a bit murky in terms

Archives

FSA | Commuter New Employee Abel Portal Time Clock