Posts Tagged ‘Fair Labor Standards Act’

The Six Criteria for Unpaid Interns

Thursday, April 28th, 2011

With the U.S. Department of Labor’s (USDOL) Wage and Hour Division focusing so closely on uncovering and investigating violations of the Fair Labor Standards Act (FLSA), employers need to be sure that they are complying with every part of the wage and hour law.  One area where the actual regulations often fail to match what employers believe them to be concerns the paying of interns.

Thankfully, USDOL released Fact Sheet #71: Internship Programs under the Fair Labor Standards Act last year, which provides general information to employers to help determine whether interns must be paid under the FLSA for the service they provide.  For an internship to be unpaid, it must meet the following six criteria:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an education environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. 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;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Along with the six criteria, USDOL also provides some examples and interpretations of workplace situations in the Fact Sheet.

We encourage employers who have an internship program in place, or who are considering one, to review this important Fact Sheet.  A review of the six criteria and the interpretations in this Fact Sheet should help clarify any confusion.  Interns who do not meet the criteria should be paid at least minimum wage, plus any earned overtime.

If you have any questions about intern compensation, please contact a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photos Source: Inspiring Interns

Five Things N.C. Employers Need to Know About Wage and Hour Regulations

Thursday, June 3rd, 2010

Earlier this year CAI invited Jim Taylor, Administrator for the N.C. Department of Labor’s Wage and Hour Bureau, and Richard Blaylock, North Carolina District Director for the U.S. Department of Labor’s Wage and Hour Division, to participate in a Members Only event – Ask the Expert: Understanding and Managing Wage and Hour Issues.

Wage and hour regulations and compliance can be difficult for any employer to keep up with and understand. Below are five things N.C. employers need to know about the many aspects of wage and hour compliance:

1. For-profit companies cannot accept volunteers. The Fair Labor Standards Act (FLSA) does not permit volunteers in for-profit private companies. Even though employees may be willing to volunteer their time, the FLSA considers work performed as a benefit to the employer and views this as an employment relationship.

2. A working lunch is compensable work time. If an employee is eating lunch at his/her desk and while eating makes business calls, conducts business, etc., this would be considered compensable work time – they are working and therefore should be compensated.

3. Meetings and training time count as compensable work time. For a lecture, meeting or training to not count as compensable work time it must meet the following criteria: a) outside normal work hours; b) attendance is voluntary; c) not job related; and d) no work is performed. Let’s use wellness lunch and learns as an example. If the attendance/participation affects your employment, including discounts on healthcare premiums, the time is not voluntary and would be paid time.

4. Commission plans should address what happens when an employee quits or is terminated. If the agreement does not specify, an employee could receive commissions on sales indefinitely. Be specific about terms and conditions regarding the commissions.

5. Overtime should be paid on the “regular rate,” not the base hourly rate. Examples of pay that should be included in the regular rate are commissions, incentives (attendance, quality), other non-discretionary bonuses and shift premiums. The regular rate is a rate per hour even if the employee is paid a different way (total pay/total hours).

For more information about the North Carolina Wage and Hour Act, visit http://www.nclabor.com/wh/wh.htm.  You may also contact a member of the CAI Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: jessica mullen