Posts Tagged ‘USDOL’

Make Sure Your Unpaid Summer Intern Is Actually an Intern

Thursday, May 16th, 2013

summer internsMany organizations offer unpaid summer internships to college students or new job seekers. The opportunity is great for both parties. Interns gain professional experience, learn more about their preferred industry and make connections with the people they meet on the job. A company that offers internships meets several potential new employees who will learn a lot about the company and its culture, which is helpful for potential training in the future.

If you choose to hire unpaid interns, make sure you take great care in following the internship program guidelines provided by the US Department of Labor (USDOL).  Failure to do so could lead to a lawsuit like in the case of Hearst Magazines and a former intern.

Protect yourself and your company from a wage and hour investigation or lawsuit by knowing all of the factors that need to be met in order to offer unpaid internships. If your internship program does not include all of the criteria below, you have an employment relationship and must pay your interns minimum wage and overtime.

According to the USDOL’s Fact Sheet #71: Internship Programs under the Fair Labor Standards Act 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.

For additional information on company internship programs and compensation, please call a member of CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746.

Photo Source: US Department of Education

7 Updates on NLRB and OFCCP Proposed Rules and Posters

Tuesday, August 14th, 2012

Make sure your company is complying with recent changes in employment regulations and up to date on the newest proposals from the National Labor Relations Board (NLRB) and the Office of Federal Contract Compliance Programs (OFCCP). There are several rules “in limbo” right now due to delays or court challenges. Review the seven updates below to avoid costly fines:

1. The NLRB Poster Rule

The controversial NLRB poster highlighting the right to strike, pass out literature and join a union is on hold due to litigation. The final briefs were just filed with the federal court in Washington, DC. Oral arguments are set for September 11 in the case. No one can say when there will be an answer. In the meantime, the poster is not required. [Note: Federal contractors fall under older, different rules.]

2. The Micro-Unit Issue

The NLRB ruled in favor of the International Association of Machinists in the Nestle Dreyer Ice Cream case, allowing a “micro-unit,” or historically-small unit, to proceed to election. The union won the vote and the company has appealed. CAI is supporting the amicus brief by the National Association of Manufacturers (NAM) to prevent these “micro-units” from being carved out of facility-wide voting units. [Note: The IAM lost three prior elections in the broader, traditional voting unit.]

3. The Ambush Election Rules

The NLRB issued rules in December 2011 changing key provisions of their election procedures. The most controversial changes shorten the time between an election petition and voting day. Court challenges were filed on two theories: (1) the Board has no authority to do this by rulemaking and (2) there was no quorum during the Board vote on the rules. The district court ruled on May 15 that there was no quorum (since only two Board members voted) and the Board agreed to “temporarily” suspend these rules. On July 29, the Board asked the court to reconsider its order because a third Board member was arguably “present” for the vote. No court has yet ruled on the Board’s authority to issue the rule in the first place. About 150 election petitions were processed under the new rules before they were suspended.

4. The USDOL Persuader Rules

The US Department of Labor (USDOL) issued proposed rules to broaden the definition of a “persuader” in union election campaigns. In summary, the revisions could require disclosure of the costs and sources of any activity that could affect an employee’s vote, such as management training to help supervisors do a better job. There is no recent activity on this and it is unlikely we will see a final rule before the elections. The American Bar Association is now officially opposed to the rules.

5. Congressional Attempts to Override Recent Rulings

There is activity in the US House of Representatives to legislatively override the NLRB ambush election rules, the USDOL persuader rules and the micro-units case. The bill has made it through “markup” and into the assigned Committee. It is hard to see how passage by the House would have any impact given the vote count in the Senate and the need for Presidential approval.

6. OFCCP Disability Rulemaking

The OFCCP (part of USDOL) issued a Notice of Proposed Rulemaking December 9, 2011 seeking comments on a possible rule to set a seven percent national “utilization goal” for hiring of disabled employees. No action has yet been taken to put the rule in place. The NAM and its allies just sponsored a study by the Center for Corporate Equality assessing the costs and issue raised by the Proposed Rule. That study has been sent to OFCCP and to the Office of Management and Budget, which must assess the cost of employer implementation. We do not expect action before the November election.

7. NLRB Sues Hyatt Hotels for At-Will Statement in Handbook

The NLRB filed a complaint against Hyatt Hotels in February for maintaining a handbook statement on at-will employment. Apparently, the Board does not object to defining “at-will” employment, to reserving the right to change rules at any time, or to saying that nothing in the handbook alters at-will status. The Board does object to seeking an employee acknowledgement form and signature where the handbook stated that at-will status could not be changed by any manager other than the President or COO. The Board viewed this as waiving the right to seek a union to bargain away those terms. This is common language in handbooks to prevent an employee from alleging a mid-level manager made a promise of employment for a fixed term or for “life.” The Board said since a union contract could alter that language, the employer’s statement was “overly broad” and violated the law. Hyatt agreed to change the wording before it went to court. This is just the latest in a string of questionable interpretations of handbook language by the NLRB. As a result, it has become difficult to predict what part of a typical employee handbook will be challenged next.

If you have questions regarding any of the issues mentioned in this article, please contact a member of CAI’s Advice and Counsel team at 919‑878‑9222 or 336‑668‑7746.

Photo Source: Victor1558

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

Eight Things N.C. Employers Need to Know About the U.S. Department of Labor

Thursday, March 31st, 2011

Albert Bell, Jr., Attorney at Law with Ward and Smith, P.A., advised participants in CAI’s recent members-only Ask the Experts session on the U.S. Department of Labor’s (USDOL) stepped-up enforcement and pro-labor approach, and highlighted areas that can present problems for employers.

Some of the key points in the presentation included:

  1. Increased collections for wage and hour violations – In 2009, the government collected more than $172 million in back wages for 219,560 employees.
  2. Increase in wage and hour investigators – There was an increase of 250 investigators in 2010, and USDOL is projecting that they will have 1,000 investigators by the end of 2011.
  3. Focus on employees – Protecting the rights of employees is the priority for USDOL.  In December 2010, it established a partnership with the American Bar Association to provide a toll-free number to employees to refer them to a private attorney in their area whom they may contact to discuss a complaint.  For more information, see http://bit.ly/dol-aba.
  4. USDOL is less helpful to employers – Employers used to be able to write letters to the USDOL explaining a situation and asking for guidance. The USDOL would then respond with an Opinion Letter to the employer but would post the Opinion Letter anonymously on the Web.  These Opinion Letters were helpful to employers in understanding USDOL interpretations of laws.  In 2010, the USDOL started issuing Administrator Interpretations and eliminated the Opinion Letter process.  The Administrator Interpretations address general interpretation of the law rather than specific situations.  The USDOL also withdrew some prior Opinion Letters.
  5. Hot Fair Labor Standards Act (FLSA) issues – Rounding of time, and donning and doffing are areas that plantiffs’ attorneys are focusing on because of the number of employees affected and the resulting potential gold mine.
  6. Strategy for 2011-2016 – The emphasis is on Plan/Prevent/Protect.  USDOL plans to propose regulations requiring employers to put systems in place to address risks, hazards and inequities in their workplaces and correct deficiencies to be compliant with the FLSA.  It is expected that once the USDOL outlines the regulations for this process, they will conduct audits to see that employers have the systems in place, rather than auditing just for specific violations of the FLSA.
  7. Proposed recordkeeping rule in 2011 – USDOL intends to publish a rule in 2011 requiring employers to notify employees of their rights under FLSA and how their hours and pay are determined.
  8. Employees you don’t know you have – Employers should revisit independent contractor classifications to make sure they truly are independent contractors and not employees.  To determine whether someone is an independent contractor or employee the USDOL considers who has control, the opportunity for profit and loss, investment, skill and permanency of the relationship.

For additional information on the current initiatives of the USDOL, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photo Source: 4nitsirk