- Written by: John E. Falcone
Employers often use unpaid interns and volunteers in their businesses. The Fair Labor Standards Act (FLSA) has strict rules regulating those categories. Failure to follow those rules can result in expensive penalties from the federal Department of Labor.
The FLSA uses a “primary beneficiary test” to determine whether someone should be classified as an unpaid intern or an employee. The DOL has an explanatory fact sheet about internship programs on its website: Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act | U.S. Department of Labor (dol.gov). The primary beneficiary test considers seven factors:
- Whether the intern and the employer clearly understand that there is no expectation of compensation.
- Whether the internship provides training similar to that which would be given in an educational environment, such as clinical and hands-on training.
- Whether the internship is tied to coursework or the receipt of academic credit.
- Whether the internship accommodates the intern's academic commitments by corresponding to the academic calendar.
- Whether the internship's duration is limited to the period in which the internship provides beneficial learning.
- Whether the intern's work complements, rather than displaces, the work of paid employees.
- Whether the intern and the employer understand there's no entitlement to a paid job at the conclusion of the internship.
The test focuses on the economic reality of the intern-employer relationship to determine who is primarily benefiting from the relationship. If the work performed by the intern primarily benefits the employer, the intern is an employee under the FLSA and must be paid.
Employers must also be careful in their use of unpaid volunteers. Persons who volunteer or donate their services, usually on a part-time basis, for public service, religious or humanitarian objectives, and without contemplation of pay, are not considered employees of the religious, charitable or similar non-profit organizations that receive their service. It is critical to note that under the FLSA, employees may not volunteer services to for-profit private sector employers.
John Falcone and Luke Malloy handle employment law matters at PLDR Law. Feel free to contact us if you have questions about this matter.
- Written by: John E. Falcone
The Virginia General Assembly’s 2023 session produced some new laws relating to employment issues which will take effect July 1.
Social Security numbers - Employers are now prohibited from using an employee's Social Security number, "or any number derivative thereof," as an employee's identification number. This includes prohibiting employers from using those numbers on any identification card or badge, access card or badge, or similar card or badge issued to employees. Although the law does not define what "derivative thereof" means, it likely includes portions of an employee's Social Security number, such as the last four digits. Employers that knowingly violate this law are subject to a civil penalty of up to $100 per violation.
Nondisclosure, confidentiality and non-disparagement agreements - Employers now are prohibited from requiring an employee or prospective employee from executing or renewing a "nondisclosure or confidentiality agreement, including any provision relating to non-disparagement, that has the purpose or effect of concealing the details relating to a claim of sexual harassment … as a condition of employment." Any such provision is considered void and unenforceable. Virginia Code § 40.1-28.01 already prohibited nondisclosure and confidentiality agreements relating to claims of sexual assault. This new amendment to that Code section now also prohibits non-disparagement provisions relating to claims of sexual assault and expands these prohibited agreements from claims of sexual assault to claims of sexual harassment. This new Virginia law does not apply to severance agreements or other post-termination agreements, but it likely applies to blanket confidentiality and non-disparagement agreements that employees may be required to enter into at the onset of employment or as employers update their policies. To the extent any of these provisions are in any of an employer's pre-employment agreements, they should be revised to carveout claims of sexual harassment.
Sub-minimum wage workers - Virginia Code § 40.1-28.9 has historically allowed employers with a special certificate issued under 29 U.S.C. § 214(c) of the Fair Labor Standards Act of 1938 to employ individuals with disabilities at a sub-minimum wage. A new law now removes this exception to the Virginia Minimum Wage Act. Effective July 1, no employer in Virginia may pay sub-minimum wages unless they had a 14(c) exemption prior to that date. Employers that had a 14(c) exemption prior to July 1, 2023, have until July 1, 2030, when the exemptions end, to increase the pay rates of disabled workers to at least the minimum wage in Virginia.
Organ donation leave - Another new law grants legally protected leave for organ and bone marrow donation. Virginia employers with 50 or more employees are required to provide eligible employees with up to 60 business days per 12-month period of unpaid organ donation leave and up to 30 business days per 12-month period of bone marrow donation leave. Employees are eligible if they have worked for the employer for at least a 12-month period and 1,250 hours during the preceding 12 months. Although the leave is unpaid, the law contains other requirements and restrictions. Organ donation leave will not impact an employee's ability to take leave under the federal Family and Medical Leave Act (FMLA) leave within the same year. Also, organ donation leave cannot run concurrently with FMLA leave.
John Falcone and Luke Malloy handle employment law matters at PLDR Law. Feel free to contact us if you have questions about this matter.
- Written by: John E. Falcone
In previous blogs we have discussed several aspects of the 2020 Virginia statute (§ 40.1-28.7:8. Covenants not to compete prohibited as to low-wage employees; civil penalty (virginia.gov)) that restricts the use of noncompete agreements. As a reminder, the law provides that as of July 1, 2020, employers are prohibited from entering into, enforcing, or threatening to enforce a covenant not to compete with any “low-wage employee.” The law defines “low-wage employee” as one whose average weekly earnings are less than the average weekly wage of the Commonwealth, as
- Written by: John E. Falcone
Many employers and employees are under the mistaken assumption that the Family and Medical Leave Act (FMLA) applies to all employers and employees. In fact, the FMLA applies only to employers that have a worksite with 50 or more employees within a 75 mile radius. In addition, even if an employer is covered by the Act, individual employees might not be eligible for coverage.
- Written by: John E. Falcone
The National Labor Relations Board (NLRB) has overruled its own precedent and has decided that certain common provisions in severance agreements violate the National Labor Relations Act (NLRA). Employers generally have included confidentiality and nondisparagement provisions in severance agreements. The NLRB now says those provisions are unlawful because they attempt to deter employees from exercising their rights to “concerted activity” protected under the NLRA. Nondisparagement provisions prohibit employees from making derogatory statements about the employer, while confidentiality provisions limit employees from disclosing the terms of the severance agreement.
- Written by: John E. Falcone
The U.S. Department of Labor (DOL) has issued new guidance concerning compensable time for remote workers. The guidance attempts to clarify certain issues that frequently arise with remote work, and can be found here: 2023-1.pdf (dol.gov).
One of the biggest challenges to employers in managing remote nonexempt employees is record-keeping. The Fair Labor Standards Act (FLSA) requires employers to keep accurate records of hours worked each day for nonexempt employees. Those rules apply whether the employee is working at home or at some other remote location.
The FLSA requires employers to pay nonexempt employees for all hours worked. “Hours worked”, however, can include break time or waiting time in some instances. Breaks of 20 minutes or less must be counted as hours worked. Meal breaks of at least 30 minutes are not counted as work time if the employee is completely relieved of duty during that period. If, for example, the employee is answering work-related calls or emails during the meal break, it is compensable work time. The DOL says that “to be completely relieved from duty, the employees must be told in advance that they may leave the job and will not have to commence work until a specified hour has arrived.”
The rules concerning whether waiting time is compensable are frustratingly vague and are fact-specific. The DOL does not clarify what qualifies as compensable waiting time when a nonexempt employee is merely idle. Employers must tailor their remote worker record-keeping to the particular needs of each business, but should give clear guidance to the remote employees concerning the employer’s expectations for waiting time and breaks.
John Falcone and Luke Malloy handle employment law matters at PLDR Law. Feel free to contact us if you have questions about this matter.
- Written by: John E. Falcone
The Federal Trade Commission (FTC) has issued a proposed new rule that would ban noncompete agreements nationwide. In its proposal, the FTC states that noncompetes are an unfair method of competition, and thus violate the Federal Trade Commission Act. The proposed rule can be found here:
https://www.ftc.gov/legal-library/browse/federal-register-notices/non-compete-clause-rulemaking
Under the proposal, employers could not ask paid or unpaid employees, independent contractors, interns, volunteers, or apprentices to sign a noncompete agreement. The rule would apply retroactively, so employers would be required to give notice to employees and former employees that existing noncompete agreements have been rescinded within 45 days of the rule's implementation. It would also apply even in situations involving high-level corporate executives or other settings in which there would clearly be a valid business reason for using a noncompete agreement.
As we have discussed in prior blogs, Virginia already has restrictions on noncompete agreements for “low wage” employees. See Va. Code § 40.1-28.7:8. Covenants not to compete prohibited as to low-wage employees; civil penalty (virginia.gov). The Virginia law, however, did not take effect until July 1, 2020 and is not retroactive, unlike this new federal proposal.
Many commentators are predicting that the rule will be struck down in court if it is finalized in its current form. Some experts believe that the FTC has exceeded its authority in proposing this new rule.
The public and employers can submit comments on the proposal within 60 days after the Federal Register publishes the proposed rule. The rule would take effect 180 days after the final version is published. Litigation is likely if the rule is finalized in its present form. We will update you with developments.
John Falcone and Luke Malloy handle employment law matters at PLDR Law. Feel free to contact us if you have questions about this matter.
- Written by: John E. Falcone
The Biden administration on Oct. 13 extended the COVID-19 public health emergency for an additional 90 days, keeping emergency measures in place through Jan. 11. The public health emergency declaration is important to group health plan sponsors because it determines the period during which group health plans and insurers must pay for Covid-19 tests and related services without charging cost-sharing. The coverage requirements apply to payment through both medical plans and pharmacy benefits. As long as the public health emergency is in place, when preventive services such as COVID-19 tests and vaccines are delivered by an out-of-network health care provider, employer plans must reimburse the provider a "reasonable amount," as determined in comparison to prevailing market rates for such services.
- Written by: John E. Falcone
A new proposed rule has been issued by the U.S. Department of Labor (DOL) to clarify who qualifies as an independent contractor under the federal wage and hour law. The federal rule concerning independent contractors has been confusing in recent years because it has periodically been revised depending upon whether a Democratic or Republican presidential administration has been in power. The new proposed rule will make it more difficult to classify workers as independent contractors.
- Written by: John E. Falcone
In previous blogs we have discussed several aspects of the 2020 Virginia statute (§ 40.1-28.7:8. Covenants not to compete prohibited as to low-wage employees; civil penalty (virginia.gov)) that restricts the use of noncompete agreements. We are learning that the statute is surprisingly nuanced.
- Written by: John E. Falcone
In previous blogs we have discussed the 2020 Virginia statute (§ 40.1-28.7:8. Covenants not to compete prohibited as to low-wage employees; civil penalty (virginia.gov)) that restricts the use of noncompete agreements. Employers who use noncompete agreements for the limited category of employees should review annually the updates to the average weekly wage.