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Top Ten Tips to Navigating
Summer Hiring and Managing
TrapsHow to legally conduct intern and temporary hiring.
Patrice ClairAttorney, Ford and Harrison LLP
Nancy Holt Counsel, Ford and Harrison LLP
A comprehensive solution for Environmental Health & Safety, HR
Management, and Sales & Finance Compliance.
•8/10 of the largest dealership groups in the
country count on KPA.
•KPA has been endorsed by 26 national and
state dealer associations
•Founding member of the Clean Auto Alliance.
KPA delivers Environmental Health & Safety, HR Management and Sales & Finance
Compliance programs that help our clients achieve regulatory compliance, control risk, protect
their assets and effectively manage people through a combination of innovative software,
award winning training and on-site consulting. Over 5,200 clients, including 8 out of 10 of the
largest dealership groups in the country, count on KPA for Environmental Health & Safety, HR
Management and Sales & Finance Compliance programs that save them time and save them
money.
KPA minimizes risks and maximizes profit for
5,200 dealers nationwide.
Questions
If you have questions during
the presentation, please
submit them using the
“Questions” feature
Questions will be answered
at the end of the webinar
Applicable Laws & Enforcement Measures
FLSA in One Sentence
• All “employees”:– Must be paid at least the minimum wage
of $7.25 per hour (higher in some states) for all hours
worked in a workweek
– With time and one-half their “regular” rate of pay for all hours worked in excess of 40 in a workweek
• Unless they are “exempt” from these requirements
Applicable Laws & Enforcement Measures
Minimum Wage
• All employees must be paid at least minimum wage for all hours worked– Currently $7.25 per hour
– Or a higher state or local minimum wage
• Cash or equivalent – “free and clear”
Applicable Laws & Enforcement Measures
• “Hours worked” - includes all work that the
employer “suffers or permits”
– Even if the work is not requested or authorized
– Includes work performed before or after scheduled
shifts, including work at home
• Work Day Rule:
– Employers must pay for all working time within the
workday, from the employee's first principal activity to
the last principal activity
Applicable Laws & Enforcement Measures
• Plaintiffs’ lawyers have switched to wage and hour litigation
• Collective actions can be highly lucrative
• Plaintiff only has to prove employer’s pay practice does not comply with the law
• And… attorney’s fees awarded for successful litigants in unpaid wages claims
Applicable Laws & Enforcement Measures
Department of Labor
• Surge of recent FLSA Enforcement • Budget
• FY 2015 – submitted a budget for $11.8 billion– $41 million increase for Wage and Hour
– To be used to hire 300 investigators
» Targeting industries and employers most likely to break the law
• DOL positions on own regulations– Granted level of deference by the courts
– Employee-friendly views make it harder for employers to mount a defense
Classifications
• An employee is an individual who the employer
“suffers or permits” to work, meaning performing
work directed by, and for the benefit of, the employer
• An unpaid intern is an individual who participates in
a work-related learning experience for the benefit of
the individual who wishes to develop hands-on work
experience in a certain occupation or field
• A volunteer is an individual who performs hours of
service for a public agency or civic, charitable, or
humanitarian reasons without promise, expectation
or receipt of compensation for services rendered
DOL’s Attitude on Internships
“If you’re a for-profit employer or you want
to pursue an internship with a for-profit
employer, there aren’t going to be many
circumstances where you can have an
internship and not be paid and still be in
compliance with the law.”
- Nancy J. Leppnik
Former Acting Director of DOL’s Wage & Hour Division
Unpaid Internship Requirements - DOL
Must meet all six criteria:1. Internship, even though it includes actual operation of the
facilities of the employer, is similar to training which would be given in educational environment;
2. Internship experience is for the benefit of the intern;
3. Intern doesn’t displace regular employees; works under close supervision of existing staff;
4. 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. Intern is not necessarily entitled to a job at the conclusion of the internship; and
6. Employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Step 1: Similar to Educational Environment?
• Will the employee receive academic credit?
• Is the internship program associated with
(and/or required by) an academic institution?
• Are the skills learned during the internship
specific to a specific company?
• An unpaid internship that resembles
academic training is more likely to be lawful?
Step 2: Benefit of the Intern?
• If the intern is performing work that the
company would normally hire someone to
do, then the intern must be paid
Step 3: Displacement of Employees?
• Does the intern displace regular employees?
• Does the intern require regular supervision
by existing staff?
Step 4: Immediate Advantage?
• Employer that provides training derives no
immediate advantage from the activities of
the intern
• Operations may actually be impeded
• Think job shadowing
Step 5: Job Entitlement?
• Unpaid internship should be for a pre-
determined period
• An unpaid internship cannot be free training
for a permanent position
Step 6: Wage Expectations
• The company should clearly establish that an
unpaid internship is unpaid
• Should be advertised and agreed upon
between the company and intern in writing
before the internship begins
Six-Step Test
• If you do not meet all six requirements, then
your intern is actually an employee, and
under the FLSA must be paid:
– At least minimum wage for all hours worked
– Overtime for all hours worked over 40 per week
TOP 10 TIPS
(10) Ideally, interns should receive educational credit
- Consider school affiliation
(9) Focus must be on skills/knowledge to be gained by intern and not the benefit to the business
– Good rule of thumb: Skills learned should transfer to multiple employment settings
(8) Minimize “productive work”
TOP 10 TIPS
(7) Job shadowing – not job doing
(6) Establish in writing that no job or offer guarantee exists and that the intern will not be paid
- Be sure intern signs!
(5) Do NOT use the internship as a “trial period” for employment
TOP 10 TIPS
(4) Identify benefits for the intern–Ensure workers receive a benefit from the work (hint: copying, filing, and getting coffee is not a benefit)
–Assignments should help the intern learn about an industry or occupation
(3) Manage expectations –Internship is not an automatic path to a job
(2) Keep separate from employees–Maintain distinction in duties and responsibilities
–DO NOT use these groups of workers interchangeably
Establish Vacation Policy
• Establish vacation policy in employee
handbook
• Define service requirements for earning
vacation time
• How much vacation time may employees
earn each year? When does it accrue?
• Can accrued time be carried forward?
Establish Vacation Policy
• Specify how much advance notice is
required for requesting days off and what
approval is needed
• Establish how conflicting employee vacation
requests are prioritized (Seniority? Staff-wide
rotation?)
• Set forth limitations and parameters – e.g.
how much time off may be taken at once or
any blackout periods
Contact Information
The recorded webinar and presentation slides will be emailed to
you today including your local representative’s contact information.
www.kpaonline.com
866-356-1735