Category Archives: Department of Labor

Explaining the Unpaid Internship Enigma

judgeIf an intern is for all intents and purposes a regular employee, then should he or she still be considered an intern?

The U.S. Court of Appeals for the Second Circuit recently attempted to answer this existential question, or at least help clear up the confusion over whether interns should be treated as employees—and paid as such.

On July 2, the aforementioned appeals court—which covers New York, Connecticut and Vermont—ruled in the case of Glatt v. Fox Searchlight Pictures Inc., in which plaintiffs Eric Glatt and Alexander Footman claimed that Fox Searchlight and Fox Entertainment Group violated the Fair Labor Standards Act and New York Labor Law by failing to pay them as employees during their internships, as required by FLSA and NYLL minimum wage and overtime provisions.

In June 2013, Glatt and Footman—who interned on the set of the 2010 Fox Searchlight film Black Swan—were granted partial summary judgment by the U.S. District Court for the Southern District of New York, which found that Glatt and Footman were indeed employees under the Fair Labor Standards Act and New York Labor Law.

In reaching its decision, the court relied on a version of the Labor Department’s six-factor test to conclude the interns had been improperly classified as unpaid interns as opposed to employees. At the time, the DOL filed an amicus brief imploring the appeals court to adhere to the department’s test requirement that each of these factors—the internship is similar to training that would be received in an educational environment and the intern does not displace regular employees, for instance—is met before considering an internship unpaid.

The Second Circuit Appeals Court, however, recently opted to “decline [the] DOL’s invitation,” according to court documents, in which the appeals court described the test as “too rigid for our precedent to withstand.”

Rather, the court agreed with the defendants’ assertion that “the proper question is whether the intern or the employer is the primary beneficiary of the relationship.” To conduct the “primary beneficiary” test, the court focused on two issues—what the intern receives in exchange for his or her work and “the economic reality as it exists between the intern and the employer.”

In sending the case back to district court for further proceedings, the appeals court decision “delineates when and under what circumstances an intern must be treated—and more importantly, paid—like a regular employee,” says Mark Goldstein, a New York-based attorney and member of Reed Smith’s labor and employment group.

By making this distinction, the Second Circuit addressed an issue that “had been a thorn in employers’ sides for the past several years,” says Goldstein.

The test used by the Second Circuit Appeals Court differs from the DOL’s “all-or-nothing” approach, which essentially required that an intern be treated as an employee “every time the employer derived a benefit from the intern’s work,” Goldstein told HRE.

Under this new standard, an intern is not categorized as an employee “simply because he or she performs work for the company, or because the company derives a benefit from the intern’s work, as the DOL had attempted to argue,” he says.

Moreover, the Second Circuit “appears to have made it much more difficult for the plaintiff’s bar to obtain class and collective action certification in lawsuits brought by former interns,” in ruling that the question of an intern’s employment status is a “highly individualized inquiry,” says Goldstein.

“This alone may spell the end of the recent barrage of unpaid intern lawsuits.”

Even in light of the court’s employer-friendly decision, though, now would be a good time to assess internship programs “to ensure that such programs satisfy all applicable judicial and regulatory guidance,” says Goldstein.

“Unpaid internship programs still pose risks—including not only potential liability for wage and hour violations, but also potential tax- and benefits-related penalties—that must be weighed before an internship program is implemented.”

Are We On the Path to Paid Sick Leave?

sick employeePaid sick leave seems to be on everyone’s mind lately, from Hillary Clinton and Thomas Perez to the leadership at Chipotle and McDonald’s.

For example, you may remember Secretary of Labor Perez recently embarking on the Lead on Leave—Empowering Working Families Across America tour, during which he sought to “promote best practices and discuss how paid leave and other flexible workplace policies can help support working families and business,” according to a Department of Labor statement.

One of Perez’s stops on that roughly month-long jaunt was Oregon, where lawmakers recently passed a measure that would require employers with at least 10 workers to offer up to 40 hours of paid sick time annually. If Oregon Governor Kate Brown signs the bill—which she is expected to do—the Beaver State would join California, Connecticut and Massachusetts as the only states to have enacted paid sick leave requirements.

President Obama has urged Congress to pass federal legislation giving U.S. workers seven days of paid sick leave. But the consensus remains that such a bill would be unlikely to gain the necessary Congressional support in the near future.

Some companies, of course, aren’t waiting for a federal paid sick leave law to become reality. Microsoft, for example, made headlines in March by requiring many of its 2,000 contractors and vendors to offer 15 paid days off for sick days and vacation to their employees who perform work for Microsoft.

At the time, many scoffed at the notion of other large companies doing the same, but two of the biggest names in the fast-food universe were quick to follow the Redmond, Wash.-based tech giant’s lead.

Just days after Microsoft went public with its bold move, for instance, McDonald’s announced it would add paid time off to its roster of benefits, even for part-time workers, at the 10 percent of McDonald’s franchises that are company-owned.

And, effective July 1, Denver-based Chipotle Mexican Grill Inc. will provide paid sick leave to hourly workers—a benefit previously enjoyed exclusively by the restaurant chain’s salaried workers.

The front-runner for the Democratic presidential nomination would no doubt like to see more employers go a similar route.

Hillary Clinton has made paid sick leave a centerpiece of her platform, commending cities such as Philadelphia for signing paid sick leave bills into law, and expressing her support for such legislation in public forums.

This week, the New York Times made mention of Clinton’s assertion that no one should “have to choose between keeping a paycheck and caring for a new baby or a sick relative,” in a piece noting the momentum gathering behind paid sick leave in the business sector as well as the political sphere.

“With pay for most workers still growing sluggishly—as it has been for most of the last 15 years—political leaders are searching for policies that can lift middle-class living standards,” according to the Times. “Companies, for their part, are becoming more aggressive in trying to retain workers as the unemployment rate has fallen below 6 percent.”

Still, the fact remains that federal legislation seems unlikely to materialize any time soon, as the Times acknowledges.

“With most Republicans in Congress opposed to new leave laws, the biggest changes will probably occur at the state and local level, including in some Republican-led states.”

True enough. But with no federal movement on the horizon, it will be interesting to see if states or individual companies make significant changes in the coming months, or if Microsoft, Chipotle, McDonald’s and the like will remain outliers on paid sick leave.

H-1B: Disney Retreats; DOL Investigates

The Walt Disney Co.’s Disney ABC Television Group appears to be backing off from a layoff announcement two weeks ago, in which it had told a group of approximately 35 of its IT workers that their jobs were being outsourced to Cognizant Technology Solutions, a New Jersey-based company with large overseas operations. But now, reports Computerworld, those IT workers have been told that the layoff has been canceled.

Some of the IT workers who were to be laid off were told by Disney/ABC managers they would have to train their replacements before leaving, Computerworld reports. This is, of course, reminiscent of the move by Disney’s Parks and Resorts division to outsource 250 IT jobs to workers allegedly brought in under the H-1B visa program and have many of those employees train their replacements in order to receive severance. The furor this created when it was reported recently by mainstream publications such as the New York Times may have led Disney to cancel the latest layoffs, a source told Computerworld.

“They [Disney officials] want this to go away — right now,” said the source, a Disney/ABC IT employee who asked not to be named.

A source at Disney confirmed to Computerworld that the layoff had been rescinded. Although Cognizant is a major user of H-1B visas, it is unclear whether any of the workers in the Disney/ABC project had been brought in under the program.

Other companies besides Disney have come under fire for replacing their IT workers with H-1B visa holders, including Southern California Edison. The Department of Labor has announced it will investigate two outsourcing companies, Infosys and Tata Consultancy Services, for possible violations of rules for H-1B visa holders in conjunction with work they did for Southern California Edison. Those two companies, along with several others, are the biggest recipients of H-1B visa allotments each year. Sen. Bill Nelson, D.-Fla., has also called for an investigation of the H-1B program.

The fracas continues to focus more negative attention on the H-1B program. In a post on his blog, longtime tech observer and consultant Robert X. Cringely labels the  H-1B program “a scam” and says the argument that it’s necessary due to a shortage of technical talent here in the United States is false. He quotes an anonymous source, identified as a former chief technology officer at several companies, who said that — throughout his career — H-1B visa holders were routinely brought in by companies as a cheaper alternative to hiring more-expensive American tech workers: “The reason of course was $$$.  The H1B’s cost approx. 1/3rd or 1/4th the cost of the comparable American in the same job.”

More in the Coffer to Help Prisoners Find Jobs

It wasn’t that long ago (little more than a month) that I was blogging about an announcement by the U.S. Department of Labor that it was 126268666 -- prisoner workingcreating a $5 million funding opportunity to link inmates to jobs before they’re even released.

The idea there was to place American Job Centers inside local jails where soon-to-be-released prisoners would be able to access job-placement services and counseling to increase their chances of getting work without going through that uneasy “limbo” between living behind bars and earning a living.

Now, again from the DOL, comes significantly more, as this release announces: a whopping $27 million to fund its Training to Work-Adult Re-entry grant program to help, as its release says, “thousands of soon-to-be-released inmates become productive citizens.”

I wish I could tell you specifically how the two programs differ. Numerous calls and emails to the DOL went unanswered. But that doesn’t really matter. What does is the added help — significant help — ex-cons will be getting to rejoin the workforce and the world.

According to the announcement, the department expects to award about 20 grants with a maximum value of $1,360,000 each to provide training and employment services for men and women, ages 18 and older (including veterans), who participate in state or local work-release programs.

The approach is designed to link and coordinate education and training services for these people to get industry-recognized credentials. Those credentials will, in turn, help them find meaningful work (translated: not just assembly line and blue-collar) and give employers what they need to fill their gaps in growing sectors and industries.

Having personal experience with this — a relative who is now trying to re-enter society after paying his dues for some very bad life choices — I confess, what U.S. Secretary of Labor Thomas E. Perez has to say about this latest move resonates with me:

“A good job gives a person a sense of dignity and purpose. It enables [him or her] to find a decent place to live and enjoy a hot meal at home. Good jobs are a pathway to the middle class. Those who have paid their debt to society deserve the opportunity to find and hold useful employment. It puts money in their pocket, most of which is pumped back into the economy. In the best America, everyone shares our prosperity. That’s what these grants can make possible.”

Of course, all the money in the world can’t buy a guarantee that all hiring managers will leave all bias at the door when they enter the interview room. Or follow all the steps of the interview process laid out by the Equal Employment Opportunity Commission in its background-check guidelines, including when it’s appropriate to discuss an applicant’s past incarceration.

But it’s safe to say most employers would have to look favorably on an ex-prisoner’s initiative to get the education and credentialing he or she needs to succeed in that particular job in that particular organization in that particular industry.

If there are closed minds out there, this can only help to open them.

Hitting the Road to Promote Paid Leave

X-7Last week, Secretary of Labor Thomas Perez told the Washington Post that “so much of what becomes law in Washington starts out as an experiment in different states.”

For the next month or so, Perez will be conducting his own state-to-state experiment of sorts; one that he hopes will result in workers nationwide being afforded greater flexibility in their jobs, including the right to paid leave.

As part of the Lead on Leave—Empowering Working Families Across America tour, Perez will meet with workers, state officials and employers in a handful of cities in an effort to “promote best practices and discuss how paid leave and other flexible workplace policies can help support working families and businesses,” according to a Department of Labor statement.

Perez will have company on the coast-to-coast jaunt, which kicks off today with a stop in Seattle. Valerie Jarrett, a senior advisor to the White House, and Tina Tchsen, assistant to President Barack Obama, will join him on the tour, which also includes scheduled visits to Minnesota, California, Oregon, Georgia, Colorado and Pennsylvania.

Currently, just three states—California, New Jersey and Rhode Island—offer paid family and medical leave, while only California and Massachusetts require private employers to provide paid sick leave. Meanwhile, Illinois, Ohio and Virginia provide paid parental leave to state employees, while cities such as Chicago, Austin, Texas and San Francisco do the same for municipal workers.

We may be a ways off, however, from federal legislation that obliges employers to provide paid sick leave. As a recent New York Times article points out, President Obama has urged Congress to pass a bill giving U.S. workers seven days of paid sick leave. But, garnering the necessary support in that same Congress to approve such a bill would be “a tough obstacle” to surmount, the Times article notes.

Some organizations, however, aren’t waiting on government action.

The aforementioned Times piece details Microsoft’s “unusual” method of overcoming the absence of a federal policy, noting the company’s March 26 announcement that it would require many of its 2,000 contractors and vendors to offer their employees who perform work for Microsoft 15 paid days off for sick days and vacation time.

“In some ways, it’s a uniquely American solution,” the article continues. “ … The biggest and wealthiest companies are performing the role of setting workplace policy for other businesses.”

While applauding Microsoft’s approach to providing paid leave, Ruth Milkman told the Times she doesn’t foresee other corporate heavyweights following its lead.

“It’s a moral model, but I don’t think there’s a high probability it’s going to become universal through business initiatives,” said Milkman, a professor and sociologist of labor at the City University of New York Graduate Center. “The public wants this. The resistance is all from employers. The only way is through public policy.”

We’ll see if the Lead on Leave tour takes us any closer to such policy becoming reality.

Obama’s New TechHire Initiative

President Obama has announced the Department of Labor’s  TechHire initiative as part a new campaign to work with communities to get more Americans rapidly trained for well-paying technology jobs.

According to the White House, TechHire is “a multi-sector initiative and call to action to empower Americans with the skills they need, through universities and community colleges” but also nontraditional approaches such as “coding boot camps,” and high-quality online courses that can rapidly train workers for a well-paying job, often in just a few months.

According to the White House memo:

Employers across the United States are in critical need of talent with these skills. Many of these roles do not require a four-year computer science degree. To give Americans the opportunity they deserve, and the skills they need to be competitive in a global economy, we are highlighting TechHire partnerships.

The initiative includes:

  • A $100 million H-1B grant competition by the Department of Labor to support innovative approaches to training and successfully employing low-skill individuals with barriers to training and employment including those with child care responsibilities, people with disabilities, disconnected youth, and limited English proficient workers, among others. This grant competition will support the scaling up of evidence-based strategies such as accelerated learning, work-based learning, and Registered Apprenticeships.
  • Expanded regional employer hiring and paid internships for IT jobs (e.g., coding, web development, project management, cybersecurity) sourced from accelerated training programs based on demonstrated competencies instead of only selecting candidate using standard HR ‘markers’;
  • Expand slots, upgrade quality, and diversify participants in accelerated training pipeline – expand local programs like coding boot camps, the best of which have 90 percent job placement rates – to enable more Americans to master the skills required to fill technology jobs and create a strong pipeline of technology talent that local employers demand and will hire that can be ready in months not years; and
  • Support from locally intermediaries – municipal leadership, workforce development programs and other local resources – that help connect people to jobs based on their skills and job readiness and help employers engage local talent trained in both alternative and traditional programs.

To kick off TechHire, 21 regions, with more than 120,000 open technology jobs and more than 300 employer partners in need of this workforce, are announcing plans to work together to new ways to recruit and place applicants based on their actual skills and to create more fast track tech training opportunities.

Examples of TechHire Community commitments include:

  • St. Louis, MO. A network of over 150 employers in St. Louis’ rapidly expanding innovation ecosystem will build on a successful Mastercard pilot to partner with local non-profit Launchcode, to build the skills of women and underrepresented minorities for tech jobs, and will also place 250 apprentices in jobs in 2015 at employers like Monsanto, CitiBank, Enterprise Rent-a-Car, and Anheuser Busch.
  • New York City, NY. With employers including Microsoft, Verizon, Goldman Sachs, Google, and Facebook, the Tech Talent Pipeline is announcing new commitments to prepare college students in the City University of New York (CUNY) system for and connect them to paid internship opportunities at local tech companies. NYC will also expand successful models like the NYC Web Development Fellowship serving 18-26 year olds without a college degree in partnership with the Flatiron School.
  • State of Delaware. The new Delaware TechHire initiative is committing to training entry-level developers in a new accelerated coding bootcamp and Java and .Net accelerated community college programs giving financial institutions and healthcare employers, throughout the state, access to a new cohort of skilled software talent in a matter of months. Capital One, Bank of America, Christiana Care and others are committing to placing people trained in these programs this year.
  • Louisville, KY. Louisville has convened over 20 IT employers as part of the Code Louisville initiative to train and place new software developers, including Glowtouch, Appriss, Humana, ZirMed, and Indatus. Louisville will build on this work in support of the TechHire Initiative: the city will recruit a high-quality coding bootcamp to Louisville and establish a new partnership between Code Louisville and local degree granting institutions to further standardize employer recognition of software development skillsets.

With more than half a million unfilled jobs in information technology across all sectors of the economy, the initiative could be poised to help employers fill their high-tech talent gaps.

Second Stand-Down for Safety is Set

Citing even more compelling reasons this year than last for getting the construction-safety message out, the U.S. Department of 465986031 -- constructionLabor’s Occupational Safety and Health Administration has announced it will be holding its second annual National Fall Safety Stand-Down in May.

“With the economy on the rebound and housing starts on the rise, now is the time for all of us to renew our commitment to sending workers home safe every night,” says Secretary of Labor Thomas E. Perez.

According to OSHA, falls are still the leading cause of death in the construction industry, as hundreds of workers die each year and thousands more suffer catastrophic, debilitating injuries. Yet, lack of proper fall protection remains the most frequently cited violation by the agency.

Building on last year’s widespread participation in the one-week event, which Staff Writer Mark McGraw wrote about in this blog post,  OSHA decided to expand it from one week to two weeks, now scheduled for May 4 through 15. During that time, the agency notes in its release, “employers and workers will pause during their workday for topic talks, demonstrations and training on how to use safety harnesses, guard rails and other means to protect workers from falls.” It adds:

“Underscoring the importance of this effort, industry and business leaders, including universities, labor organizations, and community and faith-based groups, have already begun scheduling 2015 stand-downs in all 50 states and around the world.”

The stand-down initiative is part of OSHA’s fall prevention campaign, launched three years ago with the National Institute for Occupational Safety and Health, NIOSH’s National Occupational Research Agenda and The Center for Construction Research and Training, according to the announcement on Feb. 18. It cites numerous other partners for this year’s event as well.

“Given the tremendous response we’ve received, it’s clear that this is an important issue to a great number of people across this nation,” says Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels.

In the added words of NIOSH Director Dr. John Howard, “no child should lose a parent, no wife should lose a husband and no worker should lose [his or her] life in a preventable fall.”

I plan to follow this and perhaps report on this year’s participation to get an idea of just how committed the business community is to improving safety, and reducing these injuries and deaths. Stay tuned.

New Year Brings New Reporting Requirements

IND_023Throughout this past year, we’ve told you about some of the steps the Occupational Safety and Health Administration has been taking in its effort to improve workplace safety.

In June, for example, OSHA’s National Fall Safety Stand-Down saw thousands of employers join the organization in taking a timeout during the work day to focus on outlining the dangers of falls and improving fall-prevention efforts.

More recently, OSHA wrote a letter reminding some of the largest U.S. retailers of the potential hazards that accompany Black Friday sales events, and offering recommendations for keeping employees and consumers safe during the post-Thanksgiving shopping frenzy.

The organization’s latest step does more than offer recommendations, and takes effect in a matter of days.

Beginning Jan. 1, 2015, employers under the federal jurisdiction of OSHA will be required to report all work-related fatalities to the organization within eight hours, and must report all inpatient hospitalizations, amputations and losses of an eye within 24 hours of learning of the incident. In the past, employers were obligated to inform OSHA of all workplace fatalities and instances in which three or more workers were hospitalized as a result of the same event.

As Assistant Secretary of Labor and OSHA head David Michaels notes in a recent blog, employers will have three reporting options: calling or visiting their nearest area office during normal business hours, calling the 24-hour OSHA hotline at 800.321.OSHA or reporting online.

OSHA has also made available a handful of resources designed to detail the new requirements and what they mean for employers, including a dedicated web page, a list of FAQs, a fact sheet and a YouTube video.

“It is important to remember that these updated reporting requirements are not simply paperwork, but have a life-saving purpose,” wrote Michaels in the aforementioned blog. “They will help employers and workers prevent future injuries by identifying and eliminating the most serious workplace hazards.”

HRPA’s Take on Obama’s Executive Orders

The HR Policy Association just released a letter to U.S. Department of Labor Secretary Thomas Perez expressing its concerns over President Obama’s use of executive orders.

In the letter, the Washington-based HRPA states that it recognizes that the federal procurement law affords the President significant discretion to “prescribe policies and directives that the President considers necessary” to carry out the purpose of the Act, namely to “provide the Federal Government with an economical and efficient system” for contracting, among other activities.

However, the breadth of this discretion should not encompass using executive action to attempt to shape broader federal employment policy, including the modification of wage requirements for federal contract employees.

According to HRPA’s letter, signed by Dan Yager, the association’s president and general counsel, the legislation the President cites as his authority to issue Executive Order 13658, the Federal Property Administrative Services Act, was passed in 1949, long before federal contract employees constituted such a significant portion of the American workforce.

Today, more than one in five workers in the United States is employed by companies that have contracts with the federal government. Employment policy reforms targeting employees of federal contractors now have direct implications for the American economy as a whole. Even though Executive Order 13658 is limited to those employees connected to work on federal contracts, it is not uncommon for other executive orders to apply to the contractor’s entire workforce. Accordingly, we are concerned that the proposed rule is one in a series of steps toward the Administration’s larger goal of modifying without Congressional approval significant aspects of employment policy for the greater federal contractor workforce. Therefore, caution beyond the extraordinarily broad scope of the federal procurement act is warranted.

The letter ends with Yager expressing the association’s s workplace regulatory agenda.

The “economy” and “efficiency” that President Obama portends these regulations will bring to federal contracting would be best served by the legislative process. Congressional action imposes from the start a responsibility to provide an evidence-based rationale, helps shape and refine proposed policies, increases the democratic legitimacy of any changes to federal employment policy, and lessens the risk of causing financial and economic harm to the American people. We believe broad changes to federal employment policy deserve nothing less.

You can read the full letter here or the press release announcing it here.

Taking a Timeout for Safety

workplace safetyAs part of what U.S. Secretary of Labor Thomas E. Perez has described as an “unprecedented event,” employers across the country are expected to join the Occupational Safety and Health Administration this week as participants in the National Fall Safety Stand-Down.

Part of OSHA’s fall prevention campaign, the stand-down will include “tens of thousands of employers and hundreds of thousands of workers” taking a break from the job to focus on outlining the hazards of falls and improving fall prevention efforts, said Perez in a Department of Labor statement.

According to OSHA, falls are the leading cause of death in the construction industry, and lack of fall protection was the most frequently cited OSHA violation in 2013. Throughout this week, employers and workers in a variety of industries will examine how to change all of that.

For example, the University of Texas at Arlington has joined OSHA staff to kick off fall-prevention events throughout the state of Texas, while Clark Construction Group is hosting a stand-down at the Stanford University Medical Center in Palo Alto, Calif. Today, NASCAR driver Greg Biffle is due to be on hand at the Daytona International Speedway in Daytona Beach, Fla., where he will demonstrate fall protection at the facility.

“Falls cause immense pain and suffering when they happen, and we must do everything we can to stop them,” said Assistant Secretary of Labor and OSHA head David Michaels, in the DOL statement.

“The good news is that they are preventable with three easy steps. The best protection is to plan ahead, ensure workers have the right equipment and train each worker to use it.”

More information on the National Fall Safety Stand-Down—including details on conducting a stand-down, accessing free education and training tools, fact sheets and other resources, and receiving a certificate of participation—is available at www.osha.gov/StopFallsStandDown.