Smart Benefits: Planning on Summer Interns? Know the DOL Rules

Monday, January 14, 2019

Rob Calise, GoLocalWorcester Business/Health Expert

If your plans for 2019 include bringing summer interns into your workforce, it’s important to understand how these individuals are classified since “employee” status makes them eligible for minimum wage and overtime under the FLSA.

And last year, the DOL issued new guidance to help employers determine whether an unpaid intern is an employee or not.

Instead of the previous six-part test, the DOL now follows the courts and uses the “primary beneficiary” test to identify whether an intern of a for-profit employer is actually an employee.

As part of the test, the following factors are taken into account, with no single one being determinative:

The extent the intern and employer understand there is no expectation of compensation (a promise of compensation suggests an intern is an employee, and vice versa)
The extent to which the internship provides training similar to what would be giving in an educational environment
The extent to which the internship is tied to the intern’s formal education program
The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar
The extent to which the internship’s duration is limited to the period in which it provides the intern beneficial learning
The extent to which the intern’s work complements rather than displace the work of paid employees while providing educational benefits to the intern
The extent to which the intern and employer understand the internship is conducted without entitlement to a paid job at its conclusion

Employers must perform an analysis of each internship to determine the intern’s status. If a review reveals an intern is actually an employee, then they are entitled to both minimum wage and overtime pay under the FLSA.

Rob Calise is the Managing Director, Employee Benefits of The Hilb Group of New England, where he helps clients control the costs of employee benefits by focusing on consumer-driven strategies and on how to best utilize the tax savings tools the government provides. Rob serves as Chairman of the Board of United Benefit Advisors, and is a board member of the Blue Cross & Blue Shield of RI Broker Advisory Board, United HealthCare of New England Broker Advisory Board and Rhode Island Business Healthcare Advisors Council. He is also a member of the National Association of Health Underwriters (NAHU), American Health Insurance Association (AHIA) and the Employers Council on Flexible Compensation (ECFC), as well as various human resource associations. Rob is a graduate of Bryant University with a BS in Finance