Womble Employment Law Blog

On Wednesday, July 15, 2015, the United States Department of Labor released guidance addressing the misclassification of employees as independent contractors.   The guidance, an “Administrator’s Interpretation” issued by Wage and Hour Division Administrator David Weil, states that most workers are employees under the Fair Labor Standards Act (“FLSA”).   Aimed at “curtailing misclassification,” the guidance states that employees misclassified as independent contractors “may not receive important workplace protections such as the minimum wage, overtime compensation, unemployment insurance, and workers’ compensation.”   The guidance emphasizes that the FLSA’s definition of employ as “to suffer or permit to work” was designed to ensure broad coverage such that most workers are employees who are entitled to the protections of the Act.   Courts use a multi-factor “economic realities” test to determine whether a worker is in business for himself or herself, and th...

Right now, many organizations are getting ready for a new class of interns to arrive in May when schools and colleges finish for the summer.   With fully laudable intentions, many organizations offer summer internships as a chance to allow students to get their feet wet in a business or industry, fully recognizing that the students’ contributions and added value, if any, are not that great. Experience teaches that many organizations do not pay interns.   However, this is often a risky proposition.   Under the Fair Labor Standards Act, the legal standard to qualify as an unpaid internship is actually quite high.   The consequence of failing to meet that legal standard—and in our experience many may not—is that the “intern” is deemed to be a misclassified employee, and would be entitled to be paid minimum wage and overtime for all of the hours worked as an unpaid intern.   This exposure, including liquidated damages and potential penalties and attorneys’ fees...