Texas Employment Law Update : Texas Employment Lawyer & Attorney : Russell D. Cawyer : Kelly Hart & Hallman Law Firm : Dallas TX Labor Updates

Schools are out for the summer and many college and graduate students are looking for experience in what they hope will be their chosen careers.  Employer's looking to provide that experience through the use of unpaid internships must understand the rules that qualify an internship for "unpaid" status or unwittingly create potential wage and hour liability.  Last summer, the U.S. Department of Labor announced that it would crack down on employer's improper use of unpaid internships.  There is no reason to believe the DOL's interest in these kinds of investigations will be lessened this summer and so a refresher course is in order.

The Fair Labor Standards Act requires that employees be paid at least minimum wage for all hours worked.  The FLSA excludes from coverage those persons who work for another for their own advantage such as an unpaid internship.  The DOL has developed a six factor test for determining whether an internship qualifies for unpaid status.  The factors include:

1. Whether the internship, even though including actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. Whether the internship experience is for the benefit of the intern;
3. Whether the intern displaces regular employees, and works under close supervision of existing staff;
4. Whether the employer providing the training derives no immediate advantage from the activities of the inter; and on occasion its operations may actually be impeded;
5. Whether the intern is entitled to a job at the conclusion of the internship;
6. Whether the intern understands that he is not entitled to wages for the time spent on the internship.

If the internship meets all six factors, it may qualify for unpaid status.  However, the DOL takes a very narrow view of this exemption and believes that very few "for profit" employers can properly offer these programs.  The DOL has published a Fact Sheet on Internship Programs under the FLSA.  You can download the Fact Sheet here.

Other posts about unpaid internships:

Unpaid Internships May be a Problem:  Are they Employees or Not?

Unpaid Internships:  Do they Violate the FLSA?

When to Pay Summer Interns:  FLSA Guidance You Need to Know

6th Circuit Tosses DOL's Internship Test (Cautionary Note:  The Fifth Circuit (which includes Texas) has not tossed the DOL's internship test).

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Today the U.S. Department of Labor announced publication of a time keeping App for smart phones --the DOL -Timesheet.  Employees can download the free App through iTunes and can be used with the iPad, iPhone and iTouch.  The App is an electronic timesheet that allows employees to record their hours worked and calculate the amount of wages (including overtime) the employee may be owed by the employer.

The App allows employees to track multiple employers; input time manually or start and stop work time automatically; track meal period and other breaks and can even e-mail reports of the hours worked that are already converted into Excel format.  Finally, the App contains a glossary explaining common wage and hour terms and even a function to contact the Department of Labor.  DOL Timesheet is programmed for FLSA compliance; however, I would expect state wage and hour divisions or enterprising wage and hour class action counsel to develop similar Apps that would apply state wage and hour laws.

DOL Timesheet is another example (like the private attorney referral program --Bridge to Justice) of the Department's attempt to make it easier for employees to pursue claims against employers for wage and hour violations.  Employers must be vigilant to ensure that they are properly paying employees for all hours worked and at appropriate rates of pay for those hours.

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The U.S. Department of Labor has "clarified" the reach of the FMLA by offering an interpretation of the meaning of "son or daughter" under the FMLA.  Under the FMLA regulations, a "son or daughter" is defined as:

a biological, adopted, or foster child, a stephchild, a legal ward, or a child of a person standing in loco parentis, who is either under age 18, or age 18 or older and 'incapable of self care because of a mental or physical disability' at the time that FMLA leave is to commence.

The new Administrator's interpretation (and first issued under the FMLA) provides some examples where the the Department would find a parental relationship despite the absence of of a biological or legal relationship such as:

• where an employee provides day-to-day care for his or her unmarried partner’s child (with whom there is no legal or biological relationship) but does not financially support the child;
• where an employee who will share equally in the raising of a child with the child’s biological parent would be entitled to leave for the child’s birth ;
• where an employee who will share equally in the raising of an adopted child with a same sex partner, but who does not have a legal relationship with the child, would be entitled to leave to bond with the child following placement, or to care for the child if the child had a serious health condition, because the employee stands in loco parentis to the child.

You can access a complete copy of the Administrator's interpretation here.

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Following a GAO report that concluded that the Department of Labor inadequately investigated complaints from low-wage and minimum wage workers who claimed that their employers failed to pay the federal minimum wage, required overtime, and failed to pay employees their last paycheck the DOL has reacted. 

This week, Secretary of Labor Hilda Solis  announced that the DOL Wage and Hour Division would increase the number of investigators at its field offices by 150 to refocus the department on its enforcement responsibilities.  Since Texas has three field offices of the forty-five nationwide, on a prorata basis, Texas could see a net increase of ten investigators.

Additionally, Secretary Solis announced the intent to hire 100 new investigators to enforce the compliance of contractors receiving assistance under the American Recovery and Reinvestment Act. This renewed emphasis on enforcement efforts and an increased number of investigators will undoubtedly result in more frequent and active DOL investigations.  Texas employers should ensure that their classifications of employees as exempt are accurate and that their pay practices comply with the Fair Labor Standards Act to avoid being targeted by a more active DOL.

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