With the growing number of courts rejecting the Department of Labor’s (DOL) six-part test in determining whether interns and students are employees under the Fair Labor Standards Act (FLSA), the DOL clarified on December 19, 2017 going forward, the Department will conform to these appellate court rulings by using the same “primary beneficiary” test that these courts use to determine whether interns are employees under the FLSA.
In conjunction with this change the DOL issued a new Fact Sheet on internship programs under the FLSA. This fact sheet provides general information to help determine whether interns and students working for “for- profit” employers are entitled to minimum wages and overtime pay under the Fair Labor Standards Act (FLSA).
The seven factors for determining whether an intern is an employee are:
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.
6. 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.
7. 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.
It is important to remember, these factors are not exhaustive, and a court may consider any other relevant factor; this requires “weighing and balancing all of the circumstances.”
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