Litigation can be costly for employers, even if a court ultimately decides that the unpaid internship program is valid. Until an employer obtains a court order that the program was valid, the company will generally have paid more legal fees and wasted time on the human resources department than it would have been simply paying the minimum wage, Aragon said. If all this sounds familiar to you and your organization, go back and take note – the Fair Labor Standards Act (FLSA) can weaken your unpaid internist. While many non-profit organizations believe that FLSA requirements apply only to for-profit employers in the private sector, this topic is still the subject of much discussion. The U.S. Department of Laboratory Wages and Hours (DOL) often refers to its “Fact Sheet 71: Internship Programs Under the Fair Labor Standards Act” to address this issue. The FLSA offers trainees who receive training for their own training allowance an exclusion from the definition of “worker” when the training meets certain criteria. Each internship opportunity must be subject to an individual evaluation. To find out if your organization`s intern is excluded, Is it recommended that you apply the following criteria to the situation: in a brief press release dated January 5, 2018, DOL announced that, in determining whether the interns were employed under flSA, it will meet the “primary beneficiary” test adopted by the U.S. Court of Appeals for the second circuit in fox Pictures Inclight in the future. 811 F.3d 528 (2d Cir. 2015).
The second circle found that a “primary recipient” test should be used to distinguish staff from trainees under the FLSA. This test requires the courts to analyze the “economic reality” of the intern`s relationship with his employer in order to determine whether the internship is primarily intended for the economic benefit of the employer or, first of all, for the educational benefit of the intern. If the employer is the main beneficiary, the trainee as an employee must at least be compensated in accordance with flSA minimum wage rules. If the intern benefits primarily from the relationship, the internship may be unpaid. The courts have characterized the primary beneficiary test of THE DOL as flexible, and no factor is determinative. “The question of whether an intern or student is an FLSA collaborator therefore necessarily depends on the individual circumstances of each case,” says the DOL`s internship brochure.