The Unpaid Intern: Can With Them, But Can t Live Without Them. Garvey Schubert Barer May 29, 2014

Transcription

1 Can tt Live The Unpaid Intern: Can With Them, But Can t Live Without Them Nancy C N Cooper and d JJudith dith EEndejan d j Garvey Schubert Barer May 29, 2014

2 Purpose: Use of Unpaid Interns in Public Media Provides stations with additional support Trains future journalists and public broadcasters Identifies future talent Can save money if done right Brings new energy and ideas

3 Level of Internships in 2013* PAID percent 72.9 percent in for profit, private sector 16.4 percent in non profits 10.6 percent in government UNPAID 47.8 percent 38.1 percent in for profit, private sector 40.7 percent in non profits 21.1 percent in government * internship FLSA guidelines.aspx

4 Before Your Station Brings On Interns: Develop a formal internship or volunteer plan Make sure it complies with local, state and federal regulations Develop agreements for interns and volunteers to sign on at the outset that clarify the classification Decide paid versus unpaid

5 Risks of Using Unpaid Interns They could be subject to the Fair Labor Standards Act (FLSA) They must be paid minimum wage and Are subject to overtime laws if they receive more than nominal stipend and do not qualify under strict FLSA trainee criteria

6 Unpaid Intern Risks Cont d BUT unpaid internships with nonprofit charitable organizations and in the public sector are exempt from the FLSA IF They are classified as volunteers without expectation of compensation They contribute tib t to religious, i charitable, civic ii or humanitarian purpose of nonprofit organization

7 DOL and Ordinary Volunteerism Nature of the entity receiving the services (nonprofit for instance) Compensation of any sort, such as money, room & board, perks, etc.) Expectations of benefits in the future Whether the activity is less than a full time occupation Whether regular employees are displaced Whether the services are offered freely without pressure or coercion, and Whether the services are of the kind typically associated with volunteer work [reference: DOL Opinion Letters FLSA and FLSA ]

8 DOL and Ordinary Volunteerism Cont d BUT volunteers working in non profit s commercial sector (i.e. station store) are not exempt from FLSA At start have volunteer/interns sign an agreement acknowledging they expect no compensation and they will perform ordinary voluntarism Volunteers may be paid volunteer expenses, reasonable benefits and a nominal fee *

9 DOL and Ordinary Volunteerism Cont d Nominal fee < 20% of pay a worker would be paid to perform the service and cannot be tied to productivity/hours worked A nominal fee of > $600 per year requires a 1099 form *29 C.F.R

10 Other Considerations for Interns and Volunteers Be aware (and certain) of which classification you are using Worker s compensation issues Treatment under existing employment policies (i.e. anti discrimination, i i i anti harassment) Train regular station employees on treatment of interns or volunteers

11 So Who Really Should be an Intern (as Opposed to a Volunteer)? Students Individuals seeking experience but no pay

12 Students School Credit Planned program of job training and work experience appropriate to student's abilities Training related to pre employment and employment skills Includes a sequence of activities that build upon one another, increasing in complexity Structured to expose student to all aspects of an industry and develop broad, transferrable skills

13 Students Cont d Learning experience must include real or simulated tasks or assignments that develop higher order critical thinking and problem solving skills. Written Agreement with school and intern Signed by everyone Compensation is scholastic credit Included in the written agreement

14 Work Experience Only Should be similar to vocational school; Benefit for the intern, not the station; Do not displace regular employees; Work under their supervision Station derives no immediate benefit from the activities of the intern; On occasion the operations may actually be impeded

15 Work Experience Only Cont d Intern not entitled to a job at the conclusion of the internship; and Written agreement signed by all no entitlement to wages for time spent in internship.

16 Employee? An intern will be considered an employee (covered by wage and hour law) if: Provideessential essential services to station Working in a position where someone is normally paid After internship a paid employee is hired to complete the same work Other people are being paid (or have been paid) to do the same orsimilarwork work.

17 DOL Test for Intern Thetraining, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction. The training is for the benefit of the trainees. The training does not displace regular employees, but work under their close observation.

18 DOL Test for Intern Cont d Theemployer employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer s operations may actually be impeded. The trainees are not necessarily entitled to a job at the conclusion of the training period: and The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training

19 Summary Bothnonprofit unpaid interns and volunteers are exempt from FLSA requirements and both can receive small stipends but it is less risky to have volunteers. So long as you still pay attention to meeting the tests

20 Summary Cont d Bottom line for non profits wanting to use unpaid interns is to classify them as volunteers if volunteer criteria met, rather than call them an unpaid intern subject to strict FLSA trainee test What if you want to pay a bigger stipend to get the best summer intern? This could classify that summer intern as an employee subject to minimum wage laws UNLESS the intern meets six part test under DOL guidelines

21 Why Should You Care? $$$$$$$$$$$$

22 Why Should You Care? Lots of Lawsuits Recently [35] Penalties Depending on state could be as much as treble damages Back Wages May have to retroactively pay for all the time the intern worked Back Overtime Have to calculate and guesstimate overtime owed

23 Why Should You Care? Back benefits 401(k) contributions Cost of medical insurance Bad publicity Increased scrutiny Loss of ability to have interns

24 Law Suits Common Themes Interns doing work side by side with employees Not enough educational benefit Hiring an employee to replace intern Duties performed by intern are essential to the nature of the business Writing code in a software business Editing photos in a fashion magazine

25 Law Suits Common Themes Cont d Allowing the intern to finish the posting then hiring them as an employee Intothe the exact same position withthe the sameduties Promoting the intern to a new position Company deriving i the most benefit fitfrom the interns work N h i b fi i f h i h Not the intern benefiting from the experience to the Company s detriment

26 How to Keep Your Intern an Intern Written program Requirements for acceptance Requirements for performance Written terms with signed agreement Educational Program in conjunction with an academic institution Written agreement

27 How to Keep Your Intern an Intern Cont d Clearly defined job responsibilities Define the scope Monitor to make sure not exceeding the limits Make sure there is a practical experience component Not just a filing clerk Do not pay anyone to do the same or similar Do not pay anyone to do the same or similar job

28 For your time