Virtual Hawaii Employment Lawyer

“With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor.  Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers.”  View the article here:  The Unpaid Intern, Legal or Not.

Employers should review their internship programs in light of increased disputes over unpaid interns and make changes consistent with the requirements imposed by wage and hour regulations.  The U.S. Department of Labor’s Wage and Hour Division (WHD) has developed the six factors below to evaluate whether a worker is a trainee or an employee for purposes of the FLSA:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees;
3. The trainees do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

If all of the factors listed above are met, then the worker is a “trainee”, an employment relationship does not exist under the FLSA, and the FLSA’s minimum wage and overtime provisions do not apply to the worker.  Because the FLSA’s definition of “employee” is broad, the excluded category of “trainee” is necessarily quite narrow.

The Wage and Hour Division of the Department of Labor has recently reversed a prior opinion and has concluded that most mortgage loan officers will not qualify for the administrative exemption to the overtime provisions of federal law.

In Administrator’s Interpretation No. 2010-1, the DOL focused on the “production versus administrative” dichotomy in determining that mortgage loan officers are production workers whose primary duty is making sales, as opposed to administrative workers whose work is directly related to the management or general business operations of their employer or their employer’s customers.

The DOL’s newly adopted position will obviously have a great impact on the mortgage lending industry.  View the opinion here.  DOL Opinion: Mortgage Loan Officers Entitled to Overtime Pay

Secretary of Labor Hilda L. Solis today, through a national online discussion with stakeholder groups, the general public and the news media, outlined the president’s fiscal year (FY) 2011 budget request for the U.S. Department of Labor, which is built around the vision of “good jobs for everyone.” The budget launches innovative ways to prepare workers for 21st century jobs, and makes new investments in programs that protect workers’ rights, safety and health in the new economy. It reaches out to diverse audiences to ensure that all people from all communities are included in the jobs of the future. See Secretary Hilda L. Solis’ Press Release here: DOL Press Release