Have employers gone too far?
The burgeoning backlash against employer monitoring of employee social media posts.
The past few years HR professionals have been bombarded with dire warnings about the dangers of employee use of social media sites such as Facebook and Twitter. You’ve been told that your employees can damage your business’s good name and reputation. You’ve been told that you need to have policies in place to protect against that danger, and you’ve been told to make sure you enforce those policies.
All of that is still true, and is good advice. Make sure you have a good social media policy in place, and make sure you as the HR professionals take all reasonable steps to follow up on violations of that policy. That policy should be concrete and narrow. It should prohibit the dissemination of confidential information, a valid and indeed practical restriction, and it should explain what you mean by confidential information. If you want to limit who can speak on behalf of the employer to the media, that is wholly acceptable and indeed a good practice. It can and should also limit the use of the employer’s name by the employee for purposes wholly unrelated to work. All of these are legitimate exercises of an employer’s discretion to protect its name and reputation.
However, some overzealous employers have attempted to extend their reach to the wholly private postings of both potential and current employees. The media is replete with references to increasing employer demands for Facebook passwords as a condition of employment. Of course, for some employers this makes sense, and is rationally connected to on-the-job requirements. For instance, police and corrections officers could be engaging in off-the-job conduct that would place them or their coworkers at risk in their jobs, and it is eminently reasonable to conduct at least some investigation into off-the-job conduct. For the average worker, however, their off-the-job conduct has little connection to what happens on the job, and there is very little need to dig into private social media postings. Nevertheless, increasing numbers of employers appear to be routinely requesting access to social media sites as a condition of employment, even when off-the-job conduct has no relation whatsoever to their job responsibilities. And, outrage over this practice is spilling out into the media.
Interestingly, the most highly publicized case driving the media outrage is one in which the employer had arguable reason to demand access to social media post. Officer Robert Collins, a nursing student, father and corrections supply officer with the Maryland Department of Public Safety and Correctional Services, returned from a leave of absence following his mother’s death and was told that he’d have to hand over his Facebook log in and password if he wanted to be reinstated, and that this was now standard procedure. In a video produced by the ACLU of Maryland, who took Mr. Collins’ case, Mr. Collins stated: “My personal communications, my personal posts, my personal pictures, looking at my personally identifiable information, where my religious beliefs, my political beliefs, my sexuality — all of these things are possibly disclosed on this page . . . It’s absolute total invasion and overreach.”
After the intervention of the ACLU of Maryland, the Maryland Department of Public Safety and Correctional Services suspended its policy. Before the policy was suspended, however, 2,689 seven candidates out of 2689 were rejected in part because of information found on their social media profiles. Another candidate was rejected for the job solely because of content on a social media profile. That candidate, along with others, used social media profiles that contained images of them showing known gang signs, according to the review. The practice was used to screen people who would be working in jails for possible illegal activity and gang affiliations.
Notwithstanding the data demonstrating the seemingly legitimate use of social media data by the Department of Public Safety and Correctional Services, in April Maryland became the first state to pass a legislative ban on employers’ request for applicants’ or employees’ social media accounts. Other state jurisdictions, including Illinois, are also considering bans, as is the U.S. Congress. Senator Richard Blumenthal of Connecticut and Representative Martin Heinrich of New Mexico introduced the federal Password Protection Act of 2012 in both houses of Congress on May 9, 2012, and Representative Eliot Engel of New York introduced the Social Networking Online Protection Act (“SNOPA”) in the House of Representatives on April 27, 2012. Both bills seek to ban employers and schools from seeking private social media posts for use in the hiring, enrollment, or discipline process. It is unclear whether these bills will ultimately pass, but there does appear to be some level of bipartisan support for the bills.
So what should the prudent HR professional do in light of the pending legislation? Thoroughly and thoughtfully assess your workplace’s legitimate needs for private social media postings. If there is a true legitimate need, carefully craft a policy that allows you to obtain the information needed while requesting the least amount of information possible. Narrow, carefully-tailored requests are much easier to justify than broad, scattershot information grabs.
If there is no legitimate need, don’t ask for it. Period. And, for most employers, there is no legitimate need to make such a request. Furthermore, you don’t need the headaches the request can cause, such as becoming liable for information, such as criminal or harassing behavior, that you could discover when reviewing employee profiles, and you don’t need to create ill will among your current and potential employees. Bottom line? Let what’s private stay private.
Amy D. Cubbage is Of Counsel in the Louisville office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She concentrates her practice in litigation in the areas of employment, complex tort and commercial litigation, including class actions, toxic torts and mass torts. Ms. Cubbage may be reached at (502) 327-5400, ext. 308 or acubbage@mmlk.com.
This article is intended as a summary of newly enacted federal law and does not constitute legal advice.
NLRB’s Continued Focus on Social Media
NLRB’s Continued Focus on Social Media, Use of Reinstatement Remedies to Protect Concerted Activity, and New Guidance for Employers Drafting Social Media Policies
As a follow-up to one of my prior blog posts — Around the Virtual Water Cooler: Assessing, Implementing and Enforcing Company Social Media Policies in Light of Recent National Labor Relations Board (“NLRB”) Trends, June 2011 — the NLRB has once again confirmed that it has made social media an enforcement priority, and that its primary target remained employers who terminate employees for engaging in “concerted activity” that is protected by the National Labor Relations Act (“NLRA”).
- A. Continued Focus on Protecting Concerted Activity Via Social Media and Recent Use of Reinstatement as a Remedy
Recently, in Design Technology Group, LLC et al., Case 20-CA-35511 (Apr. 27, 2012), an Administrative Law Judge found that a San Francisco based non-union clothing retailer, Bettie Page, engaged in unfair labor practices when it discharged three employees who had engaged in protected concerted activity — discussing poor management of their workplace and concerns about working late in an unsafe neighborhood[1] — via Facebook, just six days after the relevant social media posts. What is perhaps most noteworthy about this decision is that, not only was Bettie Page ordered to pay the discharged employees back wages, it was also ordered to reinstate the employees. This should serve as a caution to employers who terminate employees for engaging in protected concerted activity via social media. It is now a reality that they may be forced to re-hire the discharged employees, despite severely strained relationships — which probably weren’t helped by the initial firing and legal action — and regardless of whether the employer has an appropriate position available.
- B. New Guidance for Employers Implementing Social Media Policies
Continued focus on unfair labor practices in response to social media communications is no surprise. What is interesting, however, is that related decisions are beginning to give employers some real guidance on what they should and should not include in their social media policies. As addressed in my last blog entry on this topic, the NLRB’s focus on social media communications was, in part, prompted by employers who drafted and enforced overly-broad social media policies. The effect of those polices was to stifle protected concerted activity by telling an employee that he or she could not utilize social media, or could not mention his or her employee in social media posts, or could not criticize his or her employer via social media, etc. In response to the NLRB’s focus on narrowing social media policies to except protected concerted activity, many employers simply included disclaimers or “saving clauses” in their social media polices. A “savings clause” or disclaimer, for example, might directly state the social media policy should not be interpreted to prohibit “protected concerted activity”.
In response to these one-size-fits all practice (among other concerns); the NLRB recently issued its second social media related memo.[2] Within this memo, the NLRB highlighted a case in which an employee was reprimanded in front of others for failing to perform a task she had never been instructed to perform. Shortly thereafter, she updated her Facebook status to include an expletive followed by the name of her employer’s store, and subsequently updated her status to state that her employer did not appreciate its employees. Co-workers commented or “liked” her status each time. She was discharged for her status updates.
While the NLRB found that this discharged employee was not engaging in protected concerted activity, but rather making individual “gripes,” it also found that the employer’s social media policy was overly-broad, and could reasonably be interpreted by employees as prohibited protected concerted activity. Thus, it was deemed unlawful. Specifically, the policy in question provided that employees should generally avoid identifying themselves as an employee of their company, unless he or she was discussing the terms and conditions of his or her employment in an “appropriate manner”. The policy did not define what constituted an “appropriate” or “inappropriate” discussion of terms and conditions of employment, through specific examples or otherwise. Importantly, the policy also included a “saving clause” that provided (in sum) that the policy would not be interpreted or applied so as to interfere with employee rights to engage in concerted activities. However, the NLRB found that the “savings clause” was insufficient to cure ambiguities in the policy, and was thus, ineffective. Its reasoning was quite simple — an employee could not be reasonably expected to know what social media language/activity was “appropriate” and what language/activity was “inappropriate”. This finding now provides some much needed guidance to employers.
In light of the NLRB’s second social media memo, which specifically addresses the ineffectiveness of savings clauses and protected concerted activity disclaimers, it is ever more clear that employers must look carefully at their social media policies, tailor them to their specific business, and spell out for its employees, what rights are protected by the NLRA as protected concerted activities. Further, if a social media policy could reasonably be interpreted by an employee to prohibit or discourage protected concerted activities, it may violate the NLRA. Employers also need to make sure that their human resources department and management team are educated in what language and activity is protected by the NLRA, and how that language and activity might be expressed via social media, so that they are properly informed when implementing discipline in response to misuse of social media.
Ryan Colleen Daugherty is an associate and member of the firm’s Litigation group. She focuses on employment and other commercial litigation, as well as estate administration and planning matters. She can be reach at rdaugherty@mmlk.com or at (859) 231-8780.
[1] The conversation amongst the discharged employees follows:
Employee A: bettie page would roll over in her grave.
Employee B: She already is girl!
Employee 1: 800 miles away yet she’s still continues our lives miserable. Phenomenal!
Employee B: And no one’s doing anything about it! Big surprise!
Employee C: “bettie page would roll over in her grave.” I’ve been thinking the same thing for quite some time.
Employee A: hey dudes it’s totally cool, tomorrow I’m bringing a California Worker’s Rights book to work. My mom works for a law firm that specializes in labor law and BOY will you be surprised by all the crap that’s going on that’s in violation 8) see you tomorrow!
The Professional Overtime Exemption
Earlier this month, Wal-Mart agreed to pay over $4.8 million in back wages and damages to employees across the country for failure to pay overtime wages as a result of an investigation of the U.S. Department of Labor. The Department of Labor found that Wal-Mart misclassified over 4,500 managers as exempt from federal regulations requiring overtime wages to be paid for work over forty hours per week.
If employers are to take anything away from the Wal-Mart investigation, it is that the duties of each position will govern whether an employee is subject to receiving overtime regulations. At least annually, employers should take the time to re-examine their classification of certain employees to ensure that they are not running afoul of federal regulations. A common area of concern is classifying employees who hold the title of manager, and who are paid a salary, as exempt overtime regulations without conducting any sort of analysis of the duties that the individual manager is required to perform.
To further complicate this analysis is the prevalent use of smartphones and twenty-four hour access to work emails. Many employers require their managers to maintain email communication beyond normal working hours. While this poses no problems for exempt managers, if there is a misclassification of that employee, employers can find themselves liable for overtime wages for work performed using a smartphone after normal working hours.
Misclassification of employees is one of the largest (and most costly) problems an employer can face and is a growing area for litigation. The Department of Labor does not just target large, national employers such as Wal-Mart, but companies of every size should also be concerned.
Cynthia L. Effinger, an Associate of the firm, joined McBrayer, McGinnis, Leslie & Kirkland, PLLC in 2012. Ms. Effinger has a broad range of legal experience gained through 13 years of practice throughout the Commonwealth of Kentucky where her clients conduct business. Ms. Effinger’s practice is concentrated in the areas of employment law and commercial litigation. She also has experience with First Amendment litigation, securities litigation and complex litigation. Ms. Effinger can be reached at ceffinger@mmlk.com or at (502) 327-5400, ext. 316.
New Guidance on the Use of Criminal Background Checks in Hiring
If you are an employer which uses criminal background checks as part of your decision process in deciding whether to hire an applicant, you should be aware that on April 25, 2012 the U.S. Equal Employment Opportunity Commission (EEOC) issued a new Guidance (EEOC Enforcement Guidance No. 915.002) which further clarifies under what circumstances such a practice may in fact be viewed as discriminatory. While the use of criminal background checks to screen applicants may seem like a colorblind endeavor, the EEOC has outlined via its Guidance when that activity can have an unlawful impact on certain groups of job applicants. This finding is based upon the EEOC’s noted findings, based upon historical data, that different races are incarcerated at different rates, making a prohibition on not hiring anyone with a conviction a prohibition which is more limiting to African-American applicants as opposed to Caucasians for example. Because of this new clarification on the potential unlawful effects criminal background checks may have, employers generally need to once again examine their hiring policies to make sure that they will not run afoul of the law even if one’s motive in conducting criminal background checks is pure.
In issuing its Guidance the EEOC has emphasized that even where criminal records exclusions are applied uniformly by an employer, the exclusions may still “disproportionately and unjustifiably” exclude people of a particular race or national origin. To avoid them being in violation of Title VII of the Civil Rights Act of 1964 an employer should then generally not have a global prohibition as not hiring anyone with a criminal conviction. Rather a list of prohibited convictions should be prepared based upon the position, and it should be documented, as part of the hiring process, how the exclusion for hiring a person with such a conviction is related to the position being filed and “consistent with business necessity” for the position. In this way if an applicant is excluded from a job based upon a criminal conviction it will be clear as to why that criminal conviction is prohibitive to the position being filled. Additionally, the EEOC has emphasized that even in instances where there is a past conviction for a crime of relevance; mitigating factors should also be taken into account to avoid possible disparate treatment or impact. For instance, the age of the conviction may make it irrelevant and an inappropriate consideration.
In its Guidance the EEOC has also provided a list of best practices which are an excellent resource for setting up a policy regarding the use of criminal background checks which will not be discriminatory in its effect. The key recommendation therein is that an employer should develop a “narrowly tailored written policy and procedure” for screening job applicants and employees. If this policy and procedure makes distinctions based upon the job being filed and the unique requirements of each position, then the company it is more likely to be in compliance with the law. In conclusion, if you are an employer who has not adopted a written policy as to the use of criminal background checks in the screening of job applicants, now is the time to do so.
This article is intended as a summary of newly enacted federal law and does not constitute legal advice.
Plan Documents Rule Ineffective to Protect ERISA Administrators Against Claims by Adverse Spouses
By now, it is abundantly clear that administrators of ERISA pension or life-insurance plans are required to pay death benefits to the spousal beneficiary identified in the employee’s plan documents even when the employee has divorced the spouse identified at the time the benefits become payable. The so called “Plan Documents Rule” can have a harsh effect as it applies even when the former spouse has waived all interest in an employee’s ERISA plan during state court divorce proceedings. See McMillan v. Parrott, 913 F.2d 310 (6th Cir. 1990); Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, 555 U.S. 285 (2009). The Supreme Court has rationalized strict interpretation of the Plan Documents Rule, in part, because it establishes a uniform administrative scheme and simplifies the duties incumbent upon a plan administrator in making distributions.
In a recent decision, IPFW Pacific Coast Pension Fund v. Lee, No. 10-6433, 2012 WL 447490 (6th Cir. Feb 13, 2012), the Sixth Circuit seemingly departed from the rationale typically used to support the Plan Documents Rule. In IPFW Pacific Coast Pension Fund, an eligible employee, Wayne Lee, properly designated his second wife as his spousal beneficiary in his employer sponsored pension fund. After Mr. Lee’s death, it became apparent that Mr. Lee had never finalized his divorce from his first wife. In overturning the decision of the district court, the Sixth Circuit opined that the rights of Mr. Lee’s respective wives should be determined based upon the validity of their marriage to Mr. Lee as determined by applicable state law. According to dicta from the Sixth Circuit opinion, the likely outcome in the district court will be that Mr. Lee’s second wife, specifically designated in plan documents, will be denied benefits under the plan because her marriage to Mr. Lee was void under applicable state law.
Nothing in the plan documents could have prepared the administrator at IPFW for making a distribution to the unknown first wife in this instance. In fact, the decision from the Sixth Circuit seemingly requires a plan administrator to make a determination as to the validity of an employee’s second marriage, under applicable state law, where two claimants contend that they have a right to the same spousal benefits. In this case, IPFW initiated an interpleader action to determine the rights of the claimed beneficiaries. While this fact scenario is certainly unique, the Court’s decision essentially requires an administrator of an ERISA plan to do the same when questions with regard to the validity of an employee’s marriage are raised by adverse claimants.
Benjamin L. Riddle is an associate in the Louisville, Kentucky office. Mr. Riddle is a member of the firm’s Litigation team, where he focuses his practice on employment law, commercial disputes and personal injury matters. He graduated from Indiana University’s Kelley School of Business in 2000 and obtained his J.D. from Indiana University, Bloomington in 2003. He is a member of the Illinois, Louisville and Kentucky Bar Associations and is admitted to practice in the U.S. District Courts in the Northern District of Illinois and the Eastern and Western Districts of Kentucky and the Sixth Circuit Court of Appeals. Mr. Riddle can be reached at (502) 327-5400, ext. 305 or briddle@mmlk.com
Unpaid Interns – Too Good to be True?
With summer fast-approaching, many employers are now deciding whether to hire summer interns. Undoubtedly, the benefits of an internship extend to both the employer and the intern. The company receives the intern’s services, while the intern enjoys exposure to and experience within his or her chosen field. If your company is considering hiring an intern, however, it is imperative that you seriously evaluate the internship program and policies to ensure that your company is not violating federal law.
The Fair Labor Standards Act (“FLSA”) provides that individuals who “suffer or [are] permitted to work must be compensated under the law for the services they perform for an employer” unless otherwise exempt. An internship in the private, for-profit sector is typically viewed as employment. As a result, these interns must be paid at least the minimum wage and overtime compensation for any hours over forty worked in a work week.
Under certain circumstances, however, individuals who participate in for-profit, private sector internships or training programs may do so without compensation. If an intern receives training for his or her own educational benefit and that training meets certain criteria, then the employer is relieved of the obligation to compensate the intern. The six criteria that must be applied when making this determination is as follows:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displaced regular employees, but works under close supervision of existing staff;
- 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;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If you are considering hiring unpaid summer interns, it is vital that you consult with an attorney with experience in employment law to ensure that your company is protected.
Brittany Blackburn Koch, Esq., is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a native of Pikeville, Kentucky, and a graduate of Centre College and the University of Kentucky College of Law. Ms. Koch’s practice focuses primarily on family law, employment law, criminal law and civil litigation. Ms. Koch has served in numerous public service roles, including representation for Fayette County Bar Association Domestic Violence Pro Bono Advocacy Program. She is actively involved in various organizations and committees, including the Board of Directors for Court Appointed Special Advocates (CASA), Young Professional Committee of Lexington Public Library Foundation, Fayette County and Kentucky Bar Associations, and Centre College Alumni Association.
School’s Out for the Summer!: Important Employment Law Considerations when Hiring Interns and Graduates
Spring is here, and along with the change in season comes a flurry of graduation announcements, parties, and for employers, a flurry of applications and resumes from recent high school and college graduates. Recent graduates and interns provide a wealth of talent for many employers, and often become a core part of their operations and strategy. However, there are a few employment law considerations that must be understood by a company’s HR representative, and really, everyone involved in the hiring process, when advertising, hiring and determining wages for your Spring hires.
Advertising for Talent – High School Diploma Requirements, Potential Violations of the Americans with Disabilities Act?
Recently, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued an Informal Discussion Letter (“EEOC Letter”)[1] which opined that employers who require high school diplomas as a minimum standard for job applicants, and who often advertise as such, may be in violation of the Americans with Disabilities Act, because they screening out individuals who are unable to graduate because of a learning disability. Though Informal Discussion Letters give guidance regarding a particular inquiry and are not binding precedent, this letter serves as a wake-up call for employers of skilled and unskilled workers alike, who have long considered a high school diploma requirement to be a minimal, achievable and useful standard to ensure that its workforce possesses basic reading, writing and math skills.
The Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq. (“ADA”), is applicable to employers who employ more than fifteen (15) employees, and prohibits employers from discriminating against a qualified individual – those who can perform the essential functions of the employment position with or without reasonable accommodation – on the basis of his or her disability, during all stages of the employment relationship, including throughout “job application procedures;” during the “hiring, advancement, or discharge of employees;” and with regard to “employee compensation, job training, and other terms, conditions, and privileges of employment.” 42 U.S. C. 12111(8) and 12112. A disability is defined with the ADA as a “physical or mental impairment that substantially limits one or more major life activities of such individual” [generally including caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working]; or “a record of such an impairment;” or “being regarded as having such an impairment”. 42 U.S.C. 12102.
According to the recent EEOC Letter, an employer may still apply the high school diploma requirement (and presumably other degree or certification requirements) if it can demonstrate that such a requirement is “job related and consistent with business necessity,” which essentially requires a showing that the functions of the particular job position cannot easily be performed by someone who does not have a high school diploma. For example, for a legal secretary, who must possess significant reading, writing, word processing, and math skills to perform such a job, a high school diploma requirement may be deemed “job related and consistent with business necessity,” but the same may not be true for a grocery bagger, hair stylist or delivery driver, who may not utilize the same skills taught in high school as a part of his or her job functions.
In light of this letter, and the reality that the EEOC may soon be inclined to apply this new position in the right case, it is prudent for employers to take another look at its job advertisements and applications to determine: (1) whether a high school diploma is actually essential to the job position; (2) what skills taught in high school are actually required for the position; and (3) how they can revise their job advertisements and applications to reflect the skill requirements necessary to the particular job, rather than a threshold diploma requirement. It is also advisable to re-train management to ensure that they are not discriminating against applicants with learning disabilities who can perform the essential job requirements with or without reasonable accommodation, but who have not been able to achieve a high school diploma. While an employer is not required to prefer the learning disabled applicant over other better qualified applicants, it must consider the applicants true ability to perform essential job functions through demonstration of skills, work history considerations, etc., in lieu of a strict high school diploma requirement.
It is recommended that you consult with counsel before advertising for a position that requires a high school diploma or other educational degree or certification.
Interviewing and Hiring Talent – Hiring “Recent Graduates,” an Age Discrimination Concern?
Advertisements for job positions seeking “recent graduates” of high school or college, may implicate an age discrimination concern, because such language discourages those over forty (40) from applying. Though in recent years, there has been an upsurge of non-traditional students seeking to fulfill their graduation requirements, or seeking advanced degrees to increase employability, older individuals are still less likely to fit into the category of “recent graduate”.[2] As such, this or similar terms might be worth avoiding when advertising a job position. It is equally important that an employer’s HR representative, or other employees involved in the hiring process, understand that certain questions or discussions during the application or interview process – How old are your children? Do you have grandchildren?, etc. — could also create a perception that an applicant is being discriminated against due to his or her age.
The Age Discrimination Act of 1975, enforced by the Civil Rights Center, prohibits discrimination on the basis of age in programs and activities that receive federal financial assistance, and the Age Discrimination in Employment Act of 1967 (“ADEA”) protects certain applicants and employees 40 years of age and older from discrimination on the basis of age. 29 U.S.C. §6101 et seq.; 29 U.S.C. §621 et seq. The ADEA, which is enforced by the Equal Employment Opportunity Commission (“EEOC”) applies throughout the employment process – hiring, compensation, promotion, discharge – and applies to the conditions or privileges of employment.
While the ADEA does not expressly prohibit asking an applicant for his or her age, such requests, or requests for information which indicates age, are closely scrutinized by the EEOC, because such questions indicate a possible intent to discriminate based on age. In order to avoid such implications, it is important that an employer’s HR representative, as well as all employees involved in the hiring process, are adequately trained, aware and sensitive to certain questions and topics of discussion that could be perceived as designed to discriminate on the basis of age. If an age inquiry is necessary – perhaps to complete a criminal background check or for other lawful purposes – an employer may wish to wait until after hiring the employee to request that information.
If you have concerns regarding whether your job advertisements, applications or hiring process could indicate intent to discriminate based upon age, you should contact counsel for advice regarding your company’s specific situation.
Paying Talent – Interns, Free Talent?
Interns are often a valuable resource for employers – from high school aged technical school interns, to college students trying to gain experience their chosen field, to law school students trying to gain valuable exposure to the practice of law – and in this still tender economic climate, many may be willing to work for free in exchange for a resume boost. However, it is important to consider whether this too-good-to-be-true deal is a violation of Federal employment law that could put your company at risk.
Pursuant to the Fair Labor Standards Act (“FLSA”), individuals who “suffer or [are] permit
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” to work must be compensated for the services he or she performs for an employer. 29 U.S.C. 203(e) (1). More often than not, interns – at least in the “for profit” public sector[3] – must be paid at least minimum wage plus overtime compensation above forty hours per workweek. When determining whether the internship position for which you wish to hire may be uncompensated, the overarching determination is whether the intern will be serving his or her own interest in receiving training or instruction, or if the intern is benefitting the employer. Walling v. Portland Terminal Co., 330 U.S. 148, 152-153 (1947).According to the U.S. Department of Labor’s Wage and Hour Division, six (6) questions have been deemed applicable to this determination, and include:
- Is the internship similar to training that would be given in an educational environment?
- Is the internship experience for the benefit of the intern?
- Does the intern displace regular employees?
- Does the employer derive any immediate advantage from the activities of the intern?
- Is the intern entitled to a job at the conclusion of the internship?
- Does the intern understand that he or she is not entitled to wages for the time spent in the internship?
Regarding the first criteria, if the internship occurs in a classroom-like setting, rather than within the employers normal operations, and if the skills learned are applicable to many employers – not just the one providing the internship – it is more likely that the intern may be exempt from the FLSA’s wage and overtime requirements. This also makes it more likely that the internship benefits the intern, rather than the employer. Also, if the intern’s activities do not result in any profit to the business (or related networking or client relations gain), if the intern is not displacing a regular employee, and if the interns activities are closely supervised by existing employees or if the intern essentially shadows an existing employee in his or her job, it is more likely that an unpaid internship is appropriate. Finally, it is important that an unpaid intern understand that he or she is not entitled to compensation and that he or she cannot expect employment at the conclusion of the internship. Such an arrangement is considered a trial period or training period for the employer, and the intern will be considered an employee subject to the FLSA’s wage and hour requirements.
If you are considering hiring unpaid summer interns, you should first consult with appropriate counsel.
Conclusion
These considerations should not deter you from hiring graduates this Spring. Interns, recent grads and educated employees in general can be a great asset to your business. However, it is important that you consider whether your advertisements, applications and hiring procedures may expose your business to liability. Typically small changes and training can go a long way towards protecting your company from the potential claims discussed above.
Ryan Colleen Daugherty is an associate and member of the firm’s Litigation group. She focuses on employment and other commercial litigation, as well as estate administration and planning matters. She can be reach at rdaugherty@mmlk.com or at (859) 231-8780.
[1] A copy of the letter can be viewed at: http://www.eeoc.gov/eeoc/foia/letters/2011/ada_qualification_standards.html.
[2] Maggie Jackson, Taking the Next Step, Boston Globe, September 13, 2009, at 1, available at http://www.boston.com/jobs/news/articles/2009/09/13/sour_economy_prompts_more_older_adults_to_return_to_school/ (“By 2007, more than a third of people studying for an associate’s or higher degrees were 25 and older. By 2017, the ranks of these older students are expected to grow 20 percent, according to the US Department of Education.”)
[3] Under certain circumstances, the FLSA makes an exception for those who volunteer to work for a state or local governmental agency or for certain religious, charitable, civic or humanitarian non-profit organizations. However, when determining whether your non-profit may hire unpaid interns, you should first consult with counsel.
