Top Ten Tips to Navigating

Summer Hiring and Managing

TrapsHow to legally conduct intern and temporary hiring.

Patrice ClairAttorney, Ford and Harrison LLP

Nancy Holt Counsel, Ford and Harrison LLP

Moderator

Rebecca WardSr. Marketing Content Specialist

(303) 219-7802

rward@kpaonline.com

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Presenter

Patrice ClairAttorney, Ford and Harrison LLP

Presenter

Nancy HoltCounsel, Ford and Harrison LLP

Questions

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at the end of the webinar

Applicable Laws & Enforcement Measures

FLSA in One Sentence

• All “employees”:– Must be paid at least the minimum wage

of $7.25 per hour (higher in some states) for all hours

worked in a workweek

– With time and one-half their “regular” rate of pay for all hours worked in excess of 40 in a workweek

• Unless they are “exempt” from these requirements

Applicable Laws & Enforcement Measures

Minimum Wage

• All employees must be paid at least minimum wage for all hours worked– Currently $7.25 per hour

– Or a higher state or local minimum wage

• Cash or equivalent – “free and clear”

Applicable Laws & Enforcement Measures

• “Hours worked” - includes all work that the

employer “suffers or permits”

– Even if the work is not requested or authorized

– Includes work performed before or after scheduled

shifts, including work at home

• Work Day Rule:

– Employers must pay for all working time within the

workday, from the employee's first principal activity to

the last principal activity

Applicable Laws & Enforcement Measures

• Plaintiffs’ lawyers have switched to wage and hour litigation

• Collective actions can be highly lucrative

• Plaintiff only has to prove employer’s pay practice does not comply with the law

• And… attorney’s fees awarded for successful litigants in unpaid wages claims

Applicable Laws & Enforcement Measures

Department of Labor

• Surge of recent FLSA Enforcement • Budget

• FY 2015 – submitted a budget for $11.8 billion– $41 million increase for Wage and Hour

– To be used to hire 300 investigators

» Targeting industries and employers most likely to break the law

• DOL positions on own regulations– Granted level of deference by the courts

– Employee-friendly views make it harder for employers to mount a defense

Structuring an Internship

Classifications

• An employee is an individual who the employer

“suffers or permits” to work, meaning performing

work directed by, and for the benefit of, the employer

• An unpaid intern is an individual who participates in

a work-related learning experience for the benefit of

the individual who wishes to develop hands-on work

experience in a certain occupation or field

• A volunteer is an individual who performs hours of

service for a public agency or civic, charitable, or

humanitarian reasons without promise, expectation

or receipt of compensation for services rendered

DOL’s Attitude on Internships

“If you’re a for-profit employer or you want

to pursue an internship with a for-profit

employer, there aren’t going to be many

circumstances where you can have an

internship and not be paid and still be in

compliance with the law.”

- Nancy J. Leppnik

Former Acting Director of DOL’s Wage & Hour Division

Unpaid Internship Requirements - DOL

Must meet all six criteria:1. Internship, even though it includes actual operation of the

facilities of the employer, is similar to training which would be given in educational environment;

2. Internship experience is for the benefit of the intern;

3. Intern doesn’t displace regular employees; works under close supervision of existing staff;

4. 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. Intern is not necessarily entitled to a job at the conclusion of the internship; and

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

Step 1: Similar to Educational Environment?

• Will the employee receive academic credit?

• Is the internship program associated with

(and/or required by) an academic institution?

• Are the skills learned during the internship

specific to a specific company?

• An unpaid internship that resembles

academic training is more likely to be lawful?

Step 2: Benefit of the Intern?

• If the intern is performing work that the

company would normally hire someone to

do, then the intern must be paid

Step 3: Displacement of Employees?

• Does the intern displace regular employees?

• Does the intern require regular supervision

by existing staff?

Step 4: Immediate Advantage?

• Employer that provides training derives no

immediate advantage from the activities of

the intern

• Operations may actually be impeded

• Think job shadowing

Step 5: Job Entitlement?

• Unpaid internship should be for a pre-

determined period

• An unpaid internship cannot be free training

for a permanent position

Step 6: Wage Expectations

• The company should clearly establish that an

unpaid internship is unpaid

• Should be advertised and agreed upon

between the company and intern in writing

before the internship begins

Six-Step Test

• If you do not meet all six requirements, then

your intern is actually an employee, and

under the FLSA must be paid:

– At least minimum wage for all hours worked

– Overtime for all hours worked over 40 per week

TOP 10 TIPS

TOP 10 TIPS

(10) Ideally, interns should receive educational credit

- Consider school affiliation

(9) Focus must be on skills/knowledge to be gained by intern and not the benefit to the business

– Good rule of thumb: Skills learned should transfer to multiple employment settings

(8) Minimize “productive work”

TOP 10 TIPS

(7) Job shadowing – not job doing

(6) Establish in writing that no job or offer guarantee exists and that the intern will not be paid

- Be sure intern signs!

(5) Do NOT use the internship as a “trial period” for employment

TOP 10 TIPS

(4) Identify benefits for the intern–Ensure workers receive a benefit from the work (hint: copying, filing, and getting coffee is not a benefit)

–Assignments should help the intern learn about an industry or occupation

(3) Manage expectations –Internship is not an automatic path to a job

(2) Keep separate from employees–Maintain distinction in duties and responsibilities

–DO NOT use these groups of workers interchangeably

TOP 10 TIPS

(1) CONSULT YOUR ATTORNEY

Managing Vacation Requests

Establish Vacation Policy

• Establish vacation policy in employee

handbook

• Define service requirements for earning

vacation time

• How much vacation time may employees

earn each year? When does it accrue?

• Can accrued time be carried forward?

Establish Vacation Policy

• Specify how much advance notice is

required for requesting days off and what

approval is needed

• Establish how conflicting employee vacation

requests are prioritized (Seniority? Staff-wide

rotation?)

• Set forth limitations and parameters – e.g.

how much time off may be taken at once or

any blackout periods

Questions and Answers

Contact Information

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