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Employment Law Clip: FLSA Classifications – Salaried Does Not Necessarily Mean Exempt From Overtime
A common misconception is that paying a salary to an employee makes the employee exempt from the overtime requirements of the Fair Labor Standards Act (FLSA). In reality, many salaried employees do not qualify for any exemption from overtime obligations, and relying solely upon whether employees are paid a salary in classifying them as exempt or nonexempt will almost certainly result in misclassifications. In this video Massachusetts Employment Lawyer Maura E. Malone discusses the process of determining whether your employees are exempt or non-exempt and the risks of failing to properly classify them.
Want more information? Try some of our other resources on this topic:
- Wage & Hour Tip: Salaried Does Not Necessarily Mean Exempt From Overtime
- Caution: Administrative Assistants Only Rarely Are Exempt From Overtime Pay
- What Does Paid “On A Salary Basis” Mean?
- New Treble Damages Requirement Makes Compliance
with Wage/Hour Laws Even More Critical - Wage & Hour Tip: Certain Bonuses Must Be Included
When Calculating Overtime Pay
Please feel free to contact any member of our Employment Law Group with any questions on Massachusetts wage payment laws.
MBBP’s Employment Law Clip Series provides quick, easy-to-digest snapshots of common Employment issues, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls. Stay tuned for the next topic on Restrictive Employment Agreements.
Patrick Administration Seeks to Ban Non-Compete Agreements
During the past several years, there have been various legislative initiatives in Massachusetts which, if successful, would have regulated and/or curtailed the use by employers of non-competition agreements. On September 10, 2013, in testimony before the Massachusetts Legislature’s Joint Committee on Labor and Workforce Development, Gregory Bialecki, Governor Patrick’s Secretary of Housing and Workforce Development, testified that the Patrick Administration supports the “outright elimination of enforceability” of all non-compete agreements in Massachusetts, regardless of duration or geographic scope. Secretary Bialecki’s testimony finally confirmed publicly what many assumed was the Patrick Administration’s position on this controversial subject.
Last Thursday, the Patrick Administration took a bigger step towards its goal of eliminating non-compete agreements by way of an economic stimulus bill that includes a proposed new Chapter 93K to enact the Uniform Trade Secrets Act (“UTSA”) in Massachusetts. The proposed Chapter also includes a provision which would render “void and unenforceable” any non-compete agreement with an employee or independent contractor.
For more information on what this means for employers, please see the full Alert.
If you have any questions, please feel free to contact a member of MBBP’s Employment Law Group.
Employment Law Clip: Internships – Paid or Unpaid?
Student internships have become increasingly popular, and while internships generally benefit employers and interns alike, there is uncertainty regarding whether internships may be paid or unpaid. This video explains the importance of distinguishing between the nonprofit and for profit sector and the regulations that apply to each.
Want more information? Try some of our other resources on this topic:
Please feel free to contact any member of our Employment Law Group with any questions on paid or unpaid internships.
MBBP’s Employment Law Clip Series provides quick, easy-to-digest snapshots of common Employment issues, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls. Stay tuned for the next topic on Restrictive Employment Agreements.
Will Your Interns Sue You for Unpaid Wages?
The end of last summer’s internship season was marked by a wave of class-action lawsuits filed by interns against entertainment, sports, and publishing companies. The interns sued for unpaid wages and overtime claiming that they in reality were employees of these companies. These much publicized lawsuits, including those against Condé Nast Publications, Fox Searchlight Pictures, Inc., Hearst Corporation, and Sean “Diddy” Combs’s Bad Boy Entertainment, led many businesses to end their internship programs altogether. Here is what you must know before allowing an unpaid intern to “work” for your for-profit business.
An intern for a for-profit business must be paid unless the internship meets the requirements of the narrow “learner/trainee” exemption under the federal Fair Labor Standards Act (“FLSA”), the law governing payment of minimum wages and overtime. Failure to meet this narrow exemption could result in costly litigation and possibly significant liability; some of the businesses recently sued have had thousands of interns in the purported “class” of plaintiffs.
The U.S. Department of Labor (the “DOL”) applies a six-criteria test to unpaid interns at private-sector, for-profit businesses to determine whether the “learner/trainee” exemption is met. The DOL’s six criteria are:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
This test may be hard for a for-profit business to pass if it receives an advantage from the services of the intern, for example if the intern performs low-level administrative and clerical tasks. Although most courts have applied a more flexible test, a number of courts have deferred to the DOL’s more stringent test, which in turn has prompted the wave of recent lawsuits. To avoid claims, companies in doubt about whether they will pass the DOL’s test should pay their interns at least minimum wage (and overtime unless they restrict interns from “working” for more than 40 hours per week) and keep accurate records of the interns’ time “worked.”
For more information on this topic, and other information about having an internship program, please contact a member of the Employment Practice Group.
Massachusetts Employment Law Blog 