New Jersey Employment Law Blog - Current Information on Employment Law and Business/Civil Litigation

My nephew just came home for summer break from his sophomore year at college, which got me to thinking.  (No, not about how much I would like to be back in college.)   What profitable use of the next three months will our returning college students make of their time?

One time-honored possibility: the internship.  Internships can be paid or unpaid.  For our present purposes, the question is whether the "unpaid" ones really should be paid under the wage and hour laws.  What follows is not about whether, as a matter of philosophy or public policy, unpaid internships are a desirable thing.  Our discussion is limited to what employers are required to do to stay out of trouble with the law as it actually exists.

Here the US Department of Labor provides us with a straight answer about what is required by the Fair Labor Standards Act [FLSA]:

Internships in the “for-profit” private sector will most often be viewed as employment, unless the test described below relating to trainees is met.  Interns in the “for-profit” private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.

In what circumstances do interns not have to be paid?  When they're trainees, as defined by the following six part test.

The following six criteria must be applied when making this determination:

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

In short, the only internship for which a private sector employer does not have to pay at least minimum wage is for a true "training" relationship.  Thus, to repeat, most internships have to be paid.

The same rules do not apply to public sector and not-for-profit/charitable employers, which still may offer unpaid internships without running afoul of the FLSA.  However, we encourage even those employers to obtain legal advice before taking on interns on an unpaid basis.

Sometimes we go way off topic, and today is such a day. And for a good cause.

Mike Greenberg is a sportscaster, the co-host of ESPN's morning drive show, the top-rated "Mike & Mike" show.  Greenberg's new book, All You Could Ask For, goes on sale today.

The interesting thing is that this is not a sports book.  Rather, it is tribute to a friend who died of breast cancer, and Greenberg is donating all proceeds from the book to the V Foundation for cancer research.  In fact, the book is written from the perspectives of three women, strangers confronted with cancer diagnoses, who find each other while waging their personal battles against the illness.

For those of you who are looking for an engaging read for your book club, All You Could Ask For fits the bill.  Mother's Day is coming, too.

It's available at Amazon and Barnes & Noble.

I'd be interested to hear what you think.

According to this article, that's a risk that employers run from condoning an office pool on the NCAA's annual basketball tournament.  But do employers realistically run the risk of a discrimination or retaliation suit because some employee can't come up with $5 to enter the pool, as the article suggests?

I've been at employment law for more than a couple of decades now, and I have never heard of an office pool causing that kind of problem.  If anyone knows of a company that was sued on such a  theory, I'd like to hear about it.

In the meantime, just use a little common sense and let your employees have some fun.

Alcoholism is a disability under both the Americans with Disabilities Act and the NJ Law Against Discrimination.  Cases in which plaintiffs have been successful on an alcoholism-related disability theory are hard to find, however.

A.D.P. v. ExxonMobil Research & Engineering Co., approved for publication on October 26, 2012, is an exception. 

The opinion is lengthy and not easy to summarize without boring you, our esteemed reader, to tears.  That we do not wish to do.  Suffice it to say that ExxonMobil's policy on alcoholism treated affected employees harshly.  In fact, the appeal was decided on the theory that the plaintifff had produced sufficient direct evidence of discrimination that the burden of persuasion shifted to the employer under a "Price Waterhouse" theory.  If you don't know what that means, don't worry.  It really just means that you're not an employment lawyer.  It's enough for you to know that most employment cases are decided under a different standard - the "McDonnell Douglas" theory - because employees seldom have access to direct evidence of discrimination.  Thus, they must fall back on indirect evidence and shifting burdens of proof.  (Feeling sleepy yet?)

Anyway, if you are an employment lawyer, or a business lawyer responsible for drafting personnel policies, you will want to read this opinion.  It's a good summary of the law, and it is mandatory reading when drafting or reviewing disability policies dealing with substance abuse in New Jersey.

There's a story in today's Wall Street Journal that discusses the decision of IBM to make 401(k) matching contributions just once per year, on December 31. 

Starting next year, IBM's contributions, which generally range from 6% to 10% of pay, will take place Dec. 31. Workers who leave the company before Dec. 15 won't qualify for the match, unless they retire.  (Emphasis ours.)

There are a lot of implications in this decision.  Want to quit before December 15?  There goes your matching contribution.  Get laid off in a reorgainzation before December 15?  No match.  Get terminated for performance reasons?  Same thing.  The only way that you qualify, apparently, for the match if you leave before December 15 is to retire.

There are practical implications for departing employees and their attorneys: damages calculations in lawsuits will be affected, as will severance negotiations.

It will be interesting to see whether other companies follow IBM's lead on this.