Archive for the 'Business' Category

California Increases Anti-Discrimination Protections for Those with Military Service

With over a million men and women on active duty and many times that number in civilian veterans around the U.S., protecting the employment rights of those who have served is an incredibly important issue. In California, new laws have taken effect as of January 1st of this year which will help protect those with military service when it comes to employment.

As of September of last year, California had the most active military that called the state home of any state, beating out Texas by around 20,000 people at 180,000 active military. Perhaps it’s no surprise they’ve taken these extra steps with the newly effected Assembly Bill 1710.

Some level of employment protections against discrimination based on military service already exist in most states and at a federal level. However, the new rules in California take these protections even further than before and provide additional penalties for violations. Let’s take a look at the federal rules and the new California protections to understand what these rules mean for you or your business.

Federal Law and Existing California Law

The Uniformed Services Employment and Reemployment Rights Act, better known as USERRA, and the Veteran’s Employment and Training Services (VETS) Act are likely the two most substantial federal protections for veterans in the workforce. USERRA makes it illegal to discriminate in employment, firing, or promotions based on somebody’s military service.

The VETS act provides training and employment placement services to veterans. Additionally, the 2011, Veterans Opportunity to Work and Hire Heroes expanded training and placement and programs. USERRA, however, represents the main federal anti-discrimination provisions protecting civilian veterans in the workforce.

military serviceIn California, the law prohibits discrimination against an officer, warrant officer, or other enlisted member of the U.S. military or naval forces based on their membership or service. This protection includes, among other things, discrimination when it comes to employment. There are civil and criminal penalties for those who violate these provisions. AB 1710 takes these rules even further.

The Changes of AB 1710

The new bill expands the protections already in place, although it does not replace them, to include some more specific elements of the employment process beyond just hiring, firing, promotions, and general negative employment action. The new bill also expands the definitions of the discrimination rules to broaden the scope of those impacted by the law. Finally, the act makes it a criminal misdemeanor, as well as a civil cause of action for damages and attorney’s fees, to violate California military anti-discrimination provisions.

The new rules prevent prejudice or injury based on military service or membership from any person, employer, officer or agent of a corporation, company or firm. The new rules prevent discrimination in the terms, condition, and privileges of employment, position or status.

This is beyond the usual protections against being refused a job or promotion based on military status and ensures that veterans are not denied benefits compared to those in similar positions based on their military membership. Benefits which cannot be denied include, but are not limited to, health care (although it can be at the employee’s expense), life insurance, disability insurance, and seniority status. The new rules also extend these protections to employment actions taken by an officer or employee of the state, or any county, city, municipal corporation, or district based on military service status.

The rules also make it a misdemeanor and civil cause of action for a person to refuse entry to an active service member of any military branch access to any public entertainment or place of amusement–along with several other locations–based on the fact that they are wearing their military uniform.

Employers are also not allowed to fire somebody over their performance of any ordered military duty or training. They also may not hinder them from performing any military service or attending drills, instruction, or anything they are called on to perform. This includes acting prejudicing the employee’s terms of employment, threatening to fire them, etc.

Private employers are not allowed to fire or take negative employment action against an employee based on any temporary incapacity–taken out of commission for 52 weeks or less–due to duty in the National Guard or Naval Militia.

Finally, the new rules prevent discrimination in lending or financing based on a person’s membership in U.S. military or naval forces. This means that lenders cannot deny a loan to an otherwise covered borrower just because they serve or served in a branch of the military or in the National Guard.

Important Steps Towards Protecting Our Military and Veterans

AB 1710 is taking some substantial steps in expanding the anti-discrimination protections of those who chose to join the military or National Guard in service of the United States. These new rules expand not only the protections but also the enforcement mechanisms behind those protections.

As a former or current military member in California, it’s crucial to know the protections available to you. This new law has expanded your rights quite a bit and it’s important to know them, so you can protect yourself in the workplace. As an employer, it’s important that you keep your policies up to date to stay out criminal and civil legal hot water. Talk to your HR department and make sure you’re keeping everything compliant with these new rules.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure. 

Massachusetts Will Bring New Laws Protecting Pregnant Workers in April

New bipartisan legislation known as the Pregnant Workers Fairness Act will be taking effect in Massachusetts on April 1st of this year–expanding protections to pregnant women and recent mothers in the workforce.

These sort of laws are incredibly important as pregnancy discrimination is an ongoing problem in this county, just between the years of 2010 and 2015 the Equal Employment Opportunity Commission dealt with over 30,000 charges of pregnancy discrimination. About a third of these charges were women who said they were outright fired for being pregnant, quite a few dealt with harassment issues, while many other charges dealt with being refused simple accommodations such as being allowed to go to the bathroom more often.

There are federal standards in place to protect the rights of pregnant women and recent mothers in the workplace. However, they are more limited than the new Massachusetts rules. There are also state by state laws on the issue. For example, every state except South Dakota, Indiana, Alabama and North Carolina have laws protecting against pregnancy discrimination.

Every state except Wyoming, Wisconsin, Indiana, North Carolina, Florida, and Georgia have laws which require employers to provide some level of accommodations to pregnant workers or recent mothers. There are even laws in about half the states on workplace breastfeeding rights.

pregnant workersThese rules are different from state to state, and it is important to know your rights based on where you live. However, no matter where you live the federal rules on the issue will impact you. To better understand your rights, let’s look at these federal rules, the new Massachusetts rules, and developments on this issue in Congress.

The Federal Rules and the Pregnancy Discrimination Act

The federal rules on the issue are primarily laid out in the 1978 Pregnancy Discrimination Act (PDA), although depending on the situation you may have some additional rights under the Americans With Disabilities Act (ADA) or the Family and Medical Leave Act (FMLA). The EEOC treats the issue as an element of sex discrimination under the PDA. However, while the PDA can protect you, it has some limitations. First and foremost, it only applies if your employer has 15 or more employees.

If the PDA applies to your employer, than they are not allowed to discriminate against you because you are pregnant, you were pregnant, you could become pregnant, you intend to become pregnant, have a medical condition related to pregnancy, or have had or are considering having an abortion. This means they can’t fire you, refuse you a job or a promotion, force you to take leave, or give you less desirable work for any of these reasons.

There is an exception for employers if you are unable to do your job at all or would pose a significant safety risk to those you work with by continuing to work. However, they must attempt to accommodate anything less than this with things such as altered break or work schedules, ergonomic furniture, permission to work from home, etc.

Even if you cannot work at all, you are potentially entitled to an accommodation of unpaid leave. Accommodations under the PDA are required if your employer gives accommodations with similar situations to yours but that aren’t pregnant. Accommodations under the ADA are given due to pregnancy related medical conditions.

Either way, you need to ask your employer for an accommodation before they must give it to you. It also important to note that your employer cannot fire you or move you to a different position based on a belief that your work would be a threat to you or your pregnancy as opposed to your coworkers.

The PDA and the ADA also forbid harassment based on pregnancy or a pregnancy related medical condition. Employers are required to put a stop to any such harassment you report to them or they become aware of.

Massachusetts’ Pregnant Workers Fairness Act

The new Massachusetts act goes beyond the provisions of the ADA and the PDA. It targets a number of hole in the federal legislation and, above all else, targets the issue reported nearly 10,000 times in five years–it requires employers to hire women back after their maternity leave. It also has no limit on the size of the employers it applies to.

The details of the law are, as with all laws, a bit more complicated than this and covers a number of other issues. First, it forbids employers from denying a reasonable accommodation based on pregnancy or a related condition–explicitly including but limiting these accommodations to lactation and breastfeeding–unless they can demonstrate the high standard of an undue hardship caused by such an accommodation.

The law forbids retaliation for requesting accommodations by targeting their employment status, pay seniority, retirement, fringe benefits or–as discussed above–refusing to reinstate the employee in the same position with all their previous benefits. It also prevents denial of employment opportunities not just on the basis of pregnancy or pregnancy related conditions, but also denial based on the need for accommodations itself.

Employers are further not allowed to force an employee to accept an accommodation they do not desire, take a leave of absence (so long as another accommodation such as allowing breastfeeding in the workplace will do).

The act also includes a non-exclusive list of the types of accommodations Massachusetts employers will be required to provide an employee covered by the law. Accommodations under the rule can only be denied if the nature and cost of the accommodation based on the size of the business and financial resources of the employer would–taken together–show an undue burden to the employer.

The accommodation process under the new law must be a timely and interactive process. An employer cannot demand documentation for accommodations related to more frequent bathroom, food or water breaks, seating, limits on lifting over 20 lbs, or a private non-bathroom space for breast feeding.

The law requires employers to provide notice of the details of the law to employers in a handbook or similar form by April 1st of this year and give written notice of the laws to all employees hired after that date prior to or at the start of their employment. They also must give notice of the rules within 10 days of an employee notifying them of a pregnancy or related condition.

Any employer who violates any of these rules is liable for quite a bit in the way of punitive damages, attorney’s fees, back pay, front pay, and more. Suffice it to say, the new laws have quite a bit of bite behind their bark.

The Federal Pregnant Workers Fairness Act

The Massachusetts law fills in a lot of the gaps in protection at the federal level. However, it certainly looks to be inspired by a federal counterpart. In March of 2017, a New York Representative by the name of Jerrold Nadler introduced legislation with the exact same name–the Pregnant Workers Fairness Act–and very similar provisions.

Unfortunately, the federal counterpart did not receive as much traction as it did in Massachusetts. It has not yet left the house and the last action on the bill saw it referred to the House Subcommittee on the Constitution and Civil Justice in June of last year. With no other action on the bill since then, it’s fair to assume that any move on this issue at a federal level will not be here for a while–or at least take a different form.

This is unfortunate, the steps Massachusetts have taken will make a real difference for pregnant women in the workforce in that state. Even outside of Massachusetts, most of states have taken at least some steps to expand on the federal rules when it comes to pregnancy discrimination. Each state is different, and it’s important to know the rights your own state gives you. For now, they are likely the highest level of protection available to you.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure. 

Woman Denied Emotional Support Peacock on United Flight

United Airlines barred a passenger named Dexter from flying. Dexter had a ticket and allegedly followed every required protocol, but spent six hours waiting in L.A. before being denied. Finally, Dexter’s owner, Ventiko, left the airport and drove cross-country.

Dexter is Ventiko’s emotional support peacock.

United Airlines confirmed that Dexter was barred from the plane on January 27, 201 because the peacock did not meet the airline’s guidelines, including weight and size. United claims that it had warned Ventiko three separate times before she arrived at the airport that Dexter would not be allowed onboard.

Airlines are tightening their restrictions after customers and airline attendants complained about some of the animals brought on board. United Airlines will require documentation confirming that an emotional support animal emotional supportis properly trained for public settings and is healthy. Delta Airlines will require the same documentation as United, but will also require the service animal’s veterinary records.

Federal guidelines compel airlines to permit passengers with disabilities to fly with trained service animals or emotional support animals, regardless of the animal’s potential to “offend or annoy” fellow passengers. However, airlines have the flexibility to deny boarding to “unusual” service animals, such as spiders, rodents, and snakes. The deciding factor is whether the animal would pose a threat to the safety of others.

Airlines and some disability-rights advocates believe that people are using federal law to fraudulently bring pets with them on their flights. The number of passenger requests for emotional support animals increased by 15% between 2016 and 2017. 76,000 support animals flew last year, nearly double the 43,000 animals that flew in 2016. The internet allows people to easily forge false papers for their pets, even if their animals are not actually service or support animals. The sudden increases in support animals lead many in the airline industry to suspect that some of the claims were fraudulent.

Civil Liberties or Community Safety

Disability laws generally require that private and public organizations make reasonable accommodations for those with disabilities. This has often included emotional support animals. Unlike service animals, a support animal does not require special training. However, the support animal must not be a nuisance to those around it.

Department of Transportation rules actually create a lower standard than the usual disability accommodation laws. Although support animals are usually prohibit from being public nuisances, DoT guidelines only require that the animal not pose a threat to others. Simply being annoying or offending is not enough to get a support animal thrown off.

Exotic emotional support animals have mixed records on public flights. In 2015, a support turkey successfully flew from Seattle. Daniel the Comfort Duck made a few headlines in 2016, but flew without incident. On the other hand, Hobie the Support Pig had to be kicked out of a flight in 2014 because it squealed and defecated before takeoff. Whether an exotic support animal would threaten passenger safety should ultimately be decided on a case by case basis.

Tips on Getting Your Support Animal through the Airport

Anyone looking to get their support animal onto a plane should follow Daniel’s example and avoid Dexter’s controversy.  So what can we learn from each?

  • Call the airline as soon as possible regarding your animal. You might need to speak with several managers to get approval and that will take time.
  • Describe your disability and how your support animal helps you with your disability. If the law requires accommodation of a disability, you must prove that you qualify for such accommodation.
  • Make sure your animal is either well-trained or you have an excellent method to dispose of its waste. Daniel the Duck wore a diaper at all times and was allowed to fly. Hobie the Pig was kicked out partly because it used the restroom everywhere.
  • Have all your paperwork done prior to the flight. Different airlines have different requirements. You should know what paperwork your airline requires and submit all of the documents prior to the day of boarding.

Volvo Settles Disability Suit with Employee Recovering from Addiction

Volvo just settled an Equal Employment Opportunity Commission (EEOC) lawsuit alleging Americans With Disabilities Act (ADA) violations to the tune of $70,000 after they refused to hire a man over his medically prescribed suboxone as part of his recovery process from opioid addiction. It may come as a surprise to some, but it is well established rule that addiction–both to drugs and alcohol–count as a disability under the ADA.

The rules are a bit more complicated than the usual ADA rules, but courts have generally been in agreement that failure to provide appropriate accommodations to those recovering from addiction before taking negative employment action (or even offering a job) can be disability discrimination under the Act. But there’s more to the exact extent of your duties as an employer or your rights as an employee than usual when it comes to addiction. To understand these rules, let’s look at Volvo’s situation, the basic ADA rules, and the rules when it comes to addiction.

Volvo’s Lawsuit and Settlement

The cause of Volvo’s legal woes was a conditional job offer for a laborer position made to an otherwise qualified applicant by the name of Michael Files back in early 2015. The condition was that Files submit to a post-offer physical examination. At this examination, Files disclosed to the nurse that he was taking medically prescribed suboxone as part of his road to recovery from former addiction.

It had been five years since Files had used any drugs–he had been a suboxone-assisted recovery program since 2010. However, the nurse told him that Volvo considered the use of suboxone on the same level or worse than using heroin. When Files showed up to start his job, Volvo’s HR department told him that they wouldn’t hire him because of his suboxone use.

This was the source of their EEOC issues, the ADA requires employees to make hiring decisions (and firing/promotion decisions) based on the qualifications of an applicant as opposed to any disability–including qualified situations where a former addict is involved with a medically supervised treatment program.

Where an ADA qualified disability comes up, the employer must explore reasonable accommodations for the employee or would be employee. This doesn’t mean an employer needs to bankrupt themselves, but they at least need to explore ways to make accommodate the disability.

So long as it isn’t extremely prohibitively expensive, and the disability doesn’t render the person incapable of performing the job the employer must provide these accommodations and consider only the applicants qualifications.

Volvo didn’t investigate the program, or individualized accommodations, whatsoever. It’s also unlikely that the suboxone program would have rendered Files incapable of manual labor. This meant that this would have been a bit of an uphill legal battle or Volvo. Thus, the settlement is not a huge surprise to avoid a costly legal struggle in court.

Besides the $70,000, the Volvo settlement includes a consent decree for the next three-years which bars Volvo from violating the ADA in the future. This is obviously a bit of an odd provision from the outside, obviously Volvo doesn’t want more lawsuits and promising not the break the law could seem a little silly, however it means that Volvo will be held more easily accountable for ADA violations soon.

Volvo is also required under the settlement to amend its policy on post-offer medical and drug evaluations to conform with the ADA. provide ADA training to its STAFF and distribute information to its employees on their ADA rights. Finally, Volvo will need to report to the EEOC on its handling of future complaints regarding ADA violations.

As mentioned, it’s no surprise Volvo settled. The only real remaining issue to discuss in their case with the evidence at hand were the complicated issues of addiction under the ADA. Even with this in mind, it seems likely that the expense of litigating a case with a poor chance of success wasn’t worth it to Volvo. Let’s look at how addiction works under the ADA to understand the thought process of Volvo here.

volvoAddiction and the ADA

There’s a bit of a push and pull when it comes to drug and alcohol use and the ADA. The ADA explicitly allows employers to ensure that they comply with federal laws regulating drug and alcohol use and keep their workplace free of illegal use of drugs and alcohol–including through drug testing. State by state, the rules get a bit more complicated for marijuana. However, at a federal level the ADA also treats addiction as a disability and provides protection to recovering drug addicts and alcoholics.

First and foremost, the ADA does not protect current use of illegal drugs. If this is the case, the addiction does not count as a disability. However, if the person was formerly addicted to drugs but is currently rehabilitated–holding this against them in an employment action violates the ADA. A current user under the ADA is anybody using drugs at the time of the decision–whether casually or as a serious addiction.

The law defines a current user as anybody who has used an illegal drug recently enough to justify an employer’ reasonable belief that there is an ongoing drug issue. Some guidelines for situations when this may be the case include positive drug test results, however the exact definition will be based on the situation at hand–the person and type of drugs involved–and can vary from one to weeks.

In a very few examples, with the right facts and history of repeated relapses courts have even allowed for current use to stretch back as far as months. It’s also worth noting that a former casual user of drugs or alcohol is not protected by the ADA–only those who have suffered addiction.

A qualified individual under the ADA must either have been successfully rehabilitated and no longer using illegal drugs, currently in a rehabilitation program but not using, or erroneously believed to be using illegal drugs such as Mr. File’s medically prescribed rehabilitation.

Even when qualified, employers can still demand that these employees meet the same performance and conduct standards as other employees. An employee cannot enter drug rehabilitation after testing positive for illegal drugs, even the same day as the test, and receive ADA protection.

Common accommodations for qualified individuals under the ADA include modifying work schedules for recovery programs and allowing employees to take leave to receive treatment without punishment.

When it come to alcoholism, the ADA treats it nearly identically to drug addiction. The same types of accommodations must be extended in similar circumstances. You can still obviously prohibit alcohol at work and require employees not to show up drunk.

You also don’t have to offer rehabilitation instead of punishment for any issues at work related to alcohol–this used to be a requirement known as firm choice rules but the EEOC no longer requires it of federal employers.

An employer is also not required to provide leave to an alcoholic employee if they can establish that such treatment would be futile. Employees are further not allowed under the act to blame alcoholism related incidents on their disability when seeking ADA protection.

It is worth noting that, for both alcoholism and drug addiction, an employer is only required to provide accommodations for those who admit to their disability and request accommodations. This means, as an employee, it is important to communicate your situation if you want protection.

This obviously raises a slightly touchy real-world issue, how will an employer react to this sort of news—ADA or no. However, if you want these protections, it is important you are clear about your situation.

Pre – Employment Issues

As is clearly shown by Volvo’s case, the ADA also applies to situations during the hiring process. While an employer can ask if an applicant drinks alcohol or is currently using drugs, they are not allowed to ask if that employee is an alcoholic, addicted to drugs, or has ever been in a rehabilitation program for one of those issues.

The situation changes after a conditional offer of employment has been made, as it was to Mr. Fine. After this point, the employer is free to ask the above questions if they ask everybody. However, as seen with Volvo, you can’t disqualify and employee on that basis alone. You’re allowed to test for drugs before or after a conditional offer of employment and take action if illegal drugs are detected. On the other hand, a medical examination can only be required after a conditional job offer.

After drug testing, it is important to ensure that you are not erroneously detecting a legally prescribed drug. As mentioned above, this can lead to an ADA violation. Normally, an employer isn’t allowed to ask about prescription drugs before making a conditional offer. However, the exception to this is to follow up for explanation on a drug test that comes back positive.

How to Avoid Volvo’s Situation

As either an employee or an employer it is crucial to understand the workings of the ADA to protect your rights or your business respectively. Volvo has settled the matter and is already has steps underway, both under the settlement and otherwise, to help them avoid this sort of costly pay out in the future.

Drug addiction and alcoholism are serious diseases that have enormous impact on the lives of tens of millions of U.S. citizens. The road to recovery can be extremely difficult, even with the help of a rehabilitation program. It can be even more difficult without a job to help support you through those trying times. The ADA takes this into account, along with the realities of running a business, in offering protection to those struggling with these serious issues.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure. 

Department of Labor Changes the Requirements for Internships

The realities of today’s job market have left many of us spending some time in the workforce as unpaid  interns. This can be an incredible opportunity to learn the intricacies of a profession, gain resume experience that is essentially necessary to be hired in an entry-level position in much of today’s economy, and develop a network within your industry.

Often, these internships can be the prequel to a more permanent position at the same place of work. Yet, we all know somebody with an internship horror story–you are basically working for free and sometimes you don’t end up feeling like you’ve got out what you put in.

The Reality of Internships in the Workplace

The truth is not all internships are legitimate, sometimes an employer is simply taking advantage. Sometimes an employer truly believes they’ve properly classified somebody as an intern and is blindsided by a lawsuit over misclassification, often resulting in costly fines, required backpay and liquidated damages. Employers are obviously required to pay employees, internships are a classification creating an exception to this issue. In other words, interns don’t count as employees under the law. This means misclassification is a very serious issue.

Determining when you are properly classified or classifying an employee as an unpaid intern has always been a bit of a challenge. There are rules that change from state to state as to the requirements to treating somebody as an unpaid intern versus as an employee. However, since 2010, the federal approach through the Department of Labor’s (DoL) approach to the topic under the Federal Labor Standards Act (FLSA) has been the same–a rigorous six-factor test.

In order to be an intern under this test all six factors need to be met–the internship must be similar to the training in an educational environment, the experience must be designed for the benefit of the intern, the intern doesn’t displace employees and works under close supervision, the employer shouldn’t draw immediate advantage from the intern (they may actually be inconvenienced), the internship doesn’t automatically translate to a job, and both parties need to go into the relationship knowing the intern isn’t getting paid.

All these elements needed to be fulfilled under this test, however the primary focus was on the “immediate benefit” section. This is a bit vague, one of the main problems with the test, but it means that if the employer is gaining a business benefit from the intern they should be treated as an employee.

internshipsThis is very strict standard, but it was put in place to make sure the intern wasn’t getting taken advantage of. Without the right provisions in place, it’s easy to imagine a situation where an unpaid intern is basically an unpaid janitor or secretary.

Are the Rules for Internships Too Strict or Too Relaxed?

Despite the importance of these rules, the rigidity of the federal standard has seen quite a bit of criticism since they were originally adopted. They’ve been rejected as a standard by several courts, most recently the 9th Circuit, and challenged by quite a few companies. The rules have been blamed being so unclear or so unyielding as to scare employers from hiring interns or running internship programs in the first place.

Just a few weeks ago, the DoL took steps to change these rules to be more in line with the looser standards often adopted by the courts. In fact, the test they have adopted is quite close to the standards adopted by the 9th Circuit–known in legal communities as the “primary beneficiary” test.

This means it’s easier to hire an intern, something useful to businesses and those seeking internships. However, it will also leave these interns more vulnerable to abuse. Let’s look at the new rules and how they will affect your business or your potential internships.

What are the New Internship Standards?

The new standards are much more flexible on internship classifications than the previous six-factor “immediate benefit” test. The DoL has described the test as focusing on the economic realities of the job market and how internships work. But like many things in law, this is no simple test. It is a seven-factor doozy.

Despite being seven factors as opposed to six, the test is still less restrictive because no one factor can be determinative one way or another. Instead of the previous tests requirements that each box be checked, the new test looks to the whole situation and uses each factor to inform an overall determination based on the considerations of each element. The elements of the test, and the way to ensure you stay in line with them, are as follows:

  1. The extent to which the intern and the employer have an agreement that the intern isn’t getting paid.  Any promise of payment or any other sort of compensation, express or implied, suggests the intern is an employee—and vice versa. This means it’s incredibly important that a signed agreement is in place that makes it clear that there are no monetary incentives associated with the internship. It’s also worth noting that money isn’t the only thing that can act as compensation, an employer needs to be clear that there aren’t any rewards associated with the internship other than experience and training.
  2. The extent to which the internship provides training that would be given 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. For example, if you have an internship through your school with a follow-up journal or something of the sort that weighs in favor of you being an intern.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. This one is straight forward, don’t make your intern skip school to attend his internship unless it’s necessary.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. This one is also simple, if you’ve had an intern for a particularly long time they aren’t learning much new unless you constantly change their duties. An intern who comes in each day and handles the same duties for a long enough period looks suspiciously like an unpaid employee.
  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. If the intern is doing the same thing as your employees, the more the intern is replacing the role of a paid hire as opposed to learning the trade the worse it looks for an employer.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job after the internship. This goes hand in hand with the first factor, as an employer make sure there’s a clear written agreement in place that the internship is not a guarantee of later employment.

The final determination from all these factors, determining whether any given intern was properly classified, rests on who is the primary beneficiary of the arrangement based on these factors. As the name of the test suggests, if the intern is receiving at least something more than 50% of the benefit of the relationship then they are properly classified. This allows a lot more benefit for an employer out of an internship relationship, or a lot less benefit for the intern depending on your point of view.

What Do These New Rules Mean for Employers and Interns?

These rules are close to the previous six factor test, at a minimum they look at many similar issues. However, it looks more to the totality of the circumstances as each issue is at most a factor weighing for or against proper classification as an intern.

This means the situation may be slightly more confusing, or at least less cut and dried, when it comes to classification. Regardless, the test will make it less likely for employers to get in trouble for misclassifying interns.

As discussed above, a clear written agreement should be signed by both parties before an employer brings on an intern. Such an agreement should include as much of the language from these seven factors as possible. Making it clear there is no compensation for the internship, monetary of otherwise, is crucial.

Other documentation associated with program, such as advertising internship positions, should also adopt language like the seven-factor test. The stated goal of the change is to be more flexible in allowing internships. However, it is still important to be as clear as possible in every related to your internship program to avoid costly court battles.

If you’re interested in getting an internship, it’s important to make sure that it’s on the up and up. While the new rules have the potential to create more available internships, they also open the doors to easier abuse of the system. Make sure your internship is on the up and up, preferably through an established a reputable organization.

It’s also worth noting that there are some exemptions to the usual internship rules. The FLSA does not apply the rules to those who volunteer for humanitarian services such as non-profit banks, volunteers for religious, charitable, civic, or other similar non-profit organization.

Similarly, volunteers for state or local governments are exempted. A volunteer is not an intern. What’s more, there is an established rule that for-profit companies cannot make use of volunteer labor.

Regardless of your position, would-be intern or employer, the new rules bring the federal position in line with the bulk of case law on the issue. This will make the issue more consistent across the nation. This will make it easier to offer internship programs. This by itself is a benefit for everybody. From here, it’s just important to make sure that the many interns across the company are properly protected.

Jonathan Lurie is a Founding Partner of The Law Offices of Lurie and Ferri (Contact Info). He primarily handles business law, employment law, and intellectual property issues, but works with all types of civil matters. He is a Vice-Chair of the Sports and Entertainment Interest Group of the California Intellectual Property Section and has won awards for his knowledge of intellectual property, start-up business issues, and California civil procedure.