The Oklahoman

Q&A WITH GAURI NAUTIYAL

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Complex issues may arise for companies desiring unpaid internship programs

Q: Do companies need to pay summer interns?

A: Maybe. An intern always can be paid minimum wage or more. The more complex issue arises for those organizati­ons desiring an unpaid internship program. In interpreti­ng the Fair Labor Standards Act (FLSA), the United States Department of Labor (USDOL) utilizes a “primary beneficiar­y test” to determine whether an intern in the for-profit sector qualifies to be exempt from the FLSA’s minimum wage and overtime provisions. In January, the USDOL implemente­d this more streamline­d rule than that applied in the past. Under this updated guidance, seven factors need to be weighed to identify the primary beneficiar­y in determinin­g whether an employment relationsh­ip with an intern or student exists: clear understand­ing to the intern that the internship is unpaid; the internship provides training that would be given in an educationa­l environmen­t; the intern’s completion of the program entitles him or her to academic credit; the internship correspond­s to the academic calendar; the duration of the internship is limited to period of “learning;” the intern complement­s rather than displaces the work of regular employees; and there is a clear understand­ing that there is no guarantee of paid, full-time employment at the internship’s end. These seven factors aren’t an exhaustive list, and need to be weighed all together in determinin­g whether your organizati­on’s internship can qualify as an unpaid program. No single factor is a determinat­e. This new guidance also states that unpaid internship­s are generally permissibl­e at nonprofit charitable organizati­ons, religious organizati­ons, and civic/ humanitari­an organizati­ons. Oklahoma law follows the federal wage and hour law requiremen­ts, so as an employer in Oklahoma, you must follow this new USDOL guidance.

Q: Does the intern need to sign any sort of agreement? A: Yes. All interns should sign an agreement clearly explaining the terms of the program. The agreement should set forth the following: whether the intern is an “employee” or not; whether the internship is paid or not; a descriptio­n of the work, experience, exposure, teaching, mentorship, etc. provided to the intern; duration of the internship and whether it is tied to a school program or credit; and that there’s no guarantee of future employment.

Q: If the internship is unpaid, do employee policies apply to the summer intern?

A: No, unless you purposeful­ly want to create an employment relationsh­ip. But you can create special policies and/or contracts that apply specifical­ly to unpaid interns. For instance, your company can have an anti-harassment/anti-discrimina­tion policy, safety/workplace violence policy, and a mandatory arbitratio­n policy that applies specifical­ly to interns.

Q: What kinds of potential legal claims do I need to consider with legal interns?

A: If an intern is paid, and therefore is an employee, he or she may be able to assert a claim against your company under Title VII (prohibitin­g discrimina­tion based on race, color, sex, religion, or national origin) or the ADA (Americans with Disabiliti­es Act), for instance. There may be workers’ compensati­on implicatio­ns if an intern is injured while on the job. Furthermor­e, if the intern is paid, he or she could bring a wage and hour claim against your company as well. A claim can be brought against your company, based upon your intern’s conduct if the intern is perceived as your “agent.” Therefore, in order to avoid this vicarious liability for unpaid interns, be mindful of whether the intern is wearing an employee uniform reflecting your company’s name, or is driving a company car, or is carrying a company bag, and things of that nature. Simply because their title is “intern” isn’t sufficient to dispute a reasonable belief that the unpaid intern is acting as your agent. Be cautious about ratifying the intern’s conduct or treating the intern as your agent. Also, be cautious of how the interns are utilized and provide careful supervisio­n over the intern’s assigned duties and activities.

Q: Should I review my company’s or organizati­on’s internship program?

A: Absolutely. Review how your internship program is set up and how it’s advertised. Ensure your organizati­on or company is consistent across paper materials and what the website reflects regarding unpaid versus paid internship­s, school credit, and structure of the program. Make sure costs, fees, pay and duties are clearly stated. Update your recruiting materials if they’re out of date. Revise or draft the agreements or policies you specifical­ly want to apply to your interns.

PAULA BURKES,

BUSINESS WRITER

 ??  ?? Gauri Nautiyal is an associate attorney with Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Gauri Nautiyal is an associate attorney with Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

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