New Case Shows Use of Unpaid Interns Can Be a Costly Employment Decision
By Diane Kimberlin and Joseph Lazazzero
In a decision that is sure to shake up how many employers handle their internship programs, a federal district court has ruled that unpaid interns working in the offices of motion picture production companies were not “trainees” under the federal Fair Labor Standards Act (FLSA) or New York law, but employees who had to be paid.
As is common in the motion picture industry, a “production company” was incorporated to make the movie “Black Swan;” and another was incorporated to make “500 Days of Summer.” Fox Searchlight Pictures, Inc., entered into production agreements with the production companies in which interns were employed to perform low-level office work. These interns took lunch orders, answered phones, arranged employees’ travel plans, and took out the trash. If an intern was not available to perform any of these tasks, they would be completed by a paid employee.
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Relying on
The Vermont Department of Labor has
The 2013 federal minimum wage will remain unchanged at $7.25 per hour for non-tipped employees, and $2.13 per hour for tipped employees. However, 7 states have announced that their minimum wage will increase on January 1, 2013. Moreover, one state has proposed an increase. Additionally, 2013 minimum wage determinations have not yet been announced by two states whose minimum wage is adjusted each January 1.
In the latest decision concerning service charges and tips in the hospitality industry, the Maine Supreme Court recently addressed whether banquet wait staff may share a “service charge” paid by customers with other employees under Maine law without violating Maine’s tip credit statute. In
On March 1, 2012 the minimum wage for employers in Santa Fe, New Mexico
In a matter of significance for California employers, in See’s Candy Shops, Inc. v. Superior Court of San Diego, the California Supreme Court
As
The Vermont Department of Labor has
Although the 2012 federal minimum wage will remain unchanged at $7.25 per hour, six states have announced that their minimum wage will increase on January 1, 2012. Additionally, one state has proposed an increase, and another will announce its 2012 minimum wage either this month or in December. One state, however, announced that its minimum wage will not change in 2012.
Bipartisan legislation introduced in the Senate last week would update the Fair Labor Standards Act’s (FLSA) computer employee exemption. Section 13(a)(17) of the FLSA establishes minimum wage and overtime exemptions for computer systems analysts, computer programmers, software engineers, or other similarly skilled workers provided that these employees’ specific job duties and compensation meet certain requirements. To learn more about the legislation and its potential implications for employers, please
Judge Gertner of the U.S. District Court for the District of Massachusetts recently issued an opinion rejecting the Klinghoffer rule, potentially making it easier for a plaintiff to prevail on claims that his or her employer failed to pay the minimum wage. Under the Klinghoffer rule, which takes its name from the case of United States v. Klinghoffer Bros. Realty Corp., 285 F.2d 487 (2d Cir. 1980), courts apply a weekly-average method to determine whether an employer is in compliance with the minimum wage requirement of the Fair Labor Standards Act. Applying this rule, courts have declined to find a minimum wage violation as long as the total weekly average wage divided by the hours actually worked is at least equal to the applicable minimum wage. For example, assume an employee works 26 hours per week at a rate of $10 per hour, earning $260 each week. Even if this employee worked an additional four hours for which she was not paid, her average hourly wage would equal $8.67, exceeding the minimum wage.
New Hampshire recently enacted a number of amendments to its wage and hour laws. Some of these amendments are of great importance to employers in the Granite State.
A federal judge in California held this week that employers may lawfully deduct amounts owed by employees on their employer-guaranteed credit cards from the employees’ final pay. In
By
e increase to $4.29 per hour, a six cent increase from $4.23. This unexpected increase is the result of a Florida court decision holding that the Florida Agency for Workforce Innovation violated Florida’s Constitution by failing to raise the Florida minimum wage on January 1, 2011.
he court agreed with the plaintiffs (including Restaurant Opportunities Center of Miami and Farmworker Association of Florida) that the Florida agency had incorrectly calculated the Florida minimum wage. Specifically, the plaintiffs had argued that in calculating the Florida minimum wage, the state agency improperly decreased the rate based on a decrease in the cost of living. As a result of a decrease in the cost of living from 2008 to 2009, the agency
determined that for 2010, the state minimum wage rate should be decreased from $7.21 to $7.06. The agency then used the reduced 2010 state minimum wage rate of $7.06 to calculate an adjusted minimum wage rate for 2011 using the 1.4 percent increase in the cost of living from 2009 to 2010, resulting in a rate of $7.16, less than the federal minimum wage. The court held that under the
decreased, resulting in a new calculation and the six cent increase, effective June 1, 2011.
appeal the court’s ruling.
Earlier this week, the Court of Appeals for the Ninth Circuit
On April 5, 2011, the
Addressing an issue of first impression in the Fourth Circuit, a Maryland federal court has held that the owner of a restaurant/tavern—who is also a bartender at his establishment—may not lawfully participate in his employee bartenders’ tip pool under the Fair Labor Standards Act,
The U.S. District Court for the Western District of New York has determined that the Fair Labor Standards Act requires employers to reimburse foreign H-2B visa workers for certain expenses paid by the workers if, after subtracting the costs from the workers’ wages, the workers’ effective net salary would fall below minimum wage. See
The Seventh Circuit recently reversed the denial of class action certification in a Fair Labor Standards Act (FLSA) collective action, rejecting the notion that FLSA collective actions and state-law class actions are incompatible when filed in the same lawsuit.
As we wrote
New York law has long prohibited employers from paying workers less than the minimum wage or failing to pay proper overtime. This newly enacted piece of legislation, the
The long-awaited
The Ninth Circuit Court of Appeals has recently held that the City of Oakland, California did not violate the Fair Labor Standards Act (“FLSA”) when it required its police officers to repay the City for the cost of their training if they voluntarily resigned before completing five years of employment. (
On January 1, 2011, six states (listed below) will increase their minimum wage requirement. Two states—along with American Samoa and the Northern Mariana Islands— elected to keep their current rate. Colorado is considering an increase to the minimum wage which, if passed, will also take effect on January 1, 2011. The federal minimum wage rate remains unchanged at $7.25/hr.
Oregon’s Bureau of Labor & Industries (BOLI)
Senator John Kerry (D-MA) and Rep. Jim McDermott (D-WA) have introduced a bill that would curtail the use of a federal “safe harbor” that allows businesses to treat workers as independent contractors for federal employment tax purposes, regardless of the employee’s actual status under the common law test. The Fair Playing Field Act of 2010 (pdf) (H.R. 6128, S. 3786) would, among other things, require the Secretary of the Treasury to issue prospective guidance on worker classification for federal employment tax purposes. The safe harbor provided under section 530 of the Revenue Act of 1978 would continue to be available until the date an individual’s employment status is reclassified. The worker’s reclassification date would be the earlier of (a) the first day of the first calendar quarter beginning more than 180 days after the date of an employee classification determination by the Secretary of the Treasury; or (b) the effective date of the “first application final regulation” issued by the Secretary of the Treasury with respect to such individual (or if later, the first day of the first calendar quarter beginning more than 180 days after such regulation is issued). To learn more about the bill and its potential implications for employers, please
In a recent opinion,
This week, Rep. Linda Sanchez (D-CA) introduced legislation that would extend the federal minimum wage and overtime protections of the Fair Labor Standards Act (FLSA) to most home care workers, improve federal and state data collection and oversight with respect to the direct care workforce, and create a grant program to help states recruit and train direct care workers. Specifically, the Direct Care Workforce Empowerment Act (
The Nevada Labor Commissioner
The
On May 19, 2010, the U.S. Department of Labor
After nearly four years, the California Supreme Court has finally issued a unanimous
In April 2010, the U.S. Department of Labor (DOL) issued a new
The U.S. Court of Appeals for the Ninth Circuit applied the First Amendment’s “ministerial exception” to the claim of a Catholic seminarian, affirming the district court’s Rule 12(c) dismissal of the plaintiff’s claim for overtime pay under the Washington Minimum Wage Act (WMWA). In
The
On July 24, 2009, the federal minimum wage will increase from $6.55 per hour to $7.25 per hour. This increase is the third and final increase in a three phase process. In light of the impending increase, there are several issues of which employers must be aware to prepare for the change: