Enforced by the Department of Labor (DOL), the Fair Labor Standards Act, which is also known as the FLSA for short, helps regulate the employer-employee relationship in all of the United States of America. Interestingly, although states like California may have their own labor laws, they also have to abide by the FLSA. In the event that the two conflict, employers have to abide by the one that is more favorable to the employee. With all that said, it should come as no surprise that any change the DOL applies to the FLSA is of monumental importance to business owners and managers on the one hand and hardworking Americans on the other.
Hence, when the DOL announced that it was changing its 2010 definition of what constitutes a legally unpaid intern, this was big news. In fact, on January 5, the department replaced the old test it used to establish the basis for hiring an unpaid intern with a more lenient one.
In a nutshell, through inspecting seven factors, the test aims to figure out who is the primary beneficiary of the intern’s work. If the intern stands to gain, then the company can offer him or her an unpaid internship. Conversely, if the company gains more from the intern’s work, then it has to pay the intern minimum wage at least, and the intern is considered to be an employee.
Despite the DOL trying its best to protect employees against malicious employers, a lot of problems can and do arise due to plenty of inherent ambiguity. For instance, according to the DOL’s new standards, ‘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” is one of the factors the test looks at when deciding who is the main beneficiary. However, this factor might be open to more than one interpretation. Consequently, interns that feel that they’ve been taken advantage of would do well to retain professional legal representation that is well versed in employment law that can help guide them through this rocky terrain.
Source: BLR, ‘Fair Labor Standards Act (FLSA),” Accessed 1/15/2018