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SUMMER IS COMING: Massachusetts Compliance Requirements with Respect to Summer Internship Programs
By: Matthew Mitchell
For the Morse Employment Law Group, the arrival of spring is marked, not by the blooming of vernal flowers, but, rather, by the steady increase of inquiries related to summer interns.
A summer internship program is often an important component of an employer’s annual business cycle: internships help connect an employer to its surrounding academic communities; internships can facilitate an employer’s civic engagement; and such programs can serve as an efficient recruitment tool, particularly in tight job markets. Despite the prevalence and value of such programs, some employers tend to see their summer interns as “casual” or “unregulated” employees. It should be noted, however, that the employment of summer interns, particularly with respect to interns who are under age 18, is a highly regulated area of Massachusetts law.
Below are a few key concepts to keep in mind:
Paid versus Unpaid Interns
Massachusetts employers must compensate their interns – at, at least, a minimum wage rate – for work performed, unless the internship program qualifies as a “training program in a charitable, educational or religious institution.” The Massachusetts Attorney General and the Massachusetts Department of Labor Standards have interpreted this standard, narrowly, to mean that an employer may not engage an intern on an unpaid basis, unless the following factors are strictly met:
- The internship is tied to the intern’s formal education program by integrated coursework, or the receipt of academic credit.
- The intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
- The internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
- The internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
As such, absent very limited circumstances, Massachusetts employers must pay their interns.
School-Aged Interns
Offering internship opportunities to minor children adds another layer of regulatory complexity:
- Massachusetts child labor laws limit the hours a worker who is under age 18 may work, and limit the types of job functions such workers may perform. In fact, there are at least 49 discrete laws that define and limit, very specifically, the type of work employees under age 18 may engage in. For example: workers under age 18 may not be employed in jobs that require the operation of electrical machinery; workers under age 16 may not be employed in a manufacturing facility.
- Massachusetts law requires employers to obtain Youth Employment Permits (work permits) for all workers under 18. In Massachusetts, children under 14 may not work at all, except in very limited cases.
- In Massachusetts, workers under 18 may not enter into contractual restrictions (such as non-disclosure or assignment of invention clauses), without parental consent, and may not be subject to non-competition agreements at all.
- There may be enhanced workers’ compensation premium obligations and benefit protections for workers under age 18, depending on the circumstances.
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To the extent that you are considering engaging summer interns this year, we recommend a brief consultation with a member of the Morse Employment Law Group. As with all matters related to Wage and Hour laws, a non-compliant summer internship program may result in significant penalties and litigation liability.
For more information, please contact Matthew Mitchell or Amanda Thibodeau.
Massachusetts Paid Family and Medical Leave Update: Department Sets May 31, 2019 Deadline for Employers to Comply with Notice Requirements
As we have reported, although the employee benefits provisions of the Massachusetts Paid Medical and Family Leave Law (the “PFML”) do not go into effect until 2021, employer compliance obligations under the PFML begin as early as the spring of 2019. A number of these early compliance hurdles flow from the PFML’s notice requirements.
The PFML requires that employers provide clear and advance notice, to their workforces, of the rights provided under the law. This requirement includes: (a) providing employees and independent contractors with so-called “Written Information Notices;” and (b) posting approved Workplace Posters.
On April 17, 2019, the Massachusetts Department of Family and Medical Leave (the “Department”), the state agency charged with administering the PFML, published template Written Information Notices and Workplace Posters forms here. In connection with the publication of these templates, the Department instructed that employers must provide their workforces with the compliant Written Information Notices (and presumably post compliant Workplace Posters) by May 31, 2019. The Department also provided the following details with respect to the compliance requirements related to the Written Information Notices:
- The Written Information Notice must be provided to all employees and independent contractors, engaged by the employer as of May 31, 2019.
- The Written Information Notice may be provided electronically, but must include the opportunity for an employee or independent contractor to acknowledge receipt or decline to acknowledge receipt of the information. The employer can receive these acknowledgments in paper form or electronically.
- In the event that an employee or independent contractor fails to acknowledge receipt, the Department shall consider an employer to have fulfilled its notice obligation if it can establish that it provided to each member of its current workforce notice and the opportunity to acknowledge or decline to acknowledge receipt.
- With respect to providing Written Information Notices to W2 employees:
– The Employer must issue a Written Information Notice to each employee within 30 days of their first day of employment. The Written Information Notice must be written in the employee’s primary language.
– Employers may use the Department template or create a customized Written Information Notice for distribution to employees. If an employer elects to customize a Written Information Notice, the custom notice must contain:
– An explanation of the availability of family and medical leave benefits
– The employee’s contribution amount and obligations
– The employer’s contribution amount and obligations
– The employer’s name and mailing address
– The employer identification number assigned by the Department
– Instructions on how to file a claim for family and medical leave benefits
– The mailing address, email address, and telephone number of the Department.
- With respect to providing Written Information Notices to Independent Contractors:
– The Employer must issue a Written Information Notice to each independent contractor, when the employer enters into the contract for services. The Written Information Notice must be written in the independent contractor’s primary language.
– Employers may use the Department template or create a customized Written Information Notice for distribution to independent contractors. If an employer elects to customize a Written Information Notice, the custom notice must contain:
– An explanation of the availability of family and medical leave benefits, and the procedures for independent contractors to become covered individuals under the PFML.
– The independent contractor’s contribution amount and obligations if they were to become a “covered” individual under the PFML.
– The employer’s contribution amount and obligations.
– The employer’s name, mailing address, and email address.
– The employer’s identification number assigned by the Department.
– Instructions on how to file a claim for family and medical leave benefits.
– The address and telephone number of the Department.
Failure to provide these required notifications may result in fines of up to $300 per violation.
For more information on the PFML, please contact Matthew Mitchell or Amanda Thibodeau.
Morse Barnes-Brown Pendleton Rebrands as Morse
Morse Barnes-Brown Pendleton is pleased to announce the next phase of its brand evolution, reflecting the Firm’s identity within the legal marketplace. Effective immediately, the Firm has adopted the stronger, simpler, more modern brand of Morse. Additionally, mbbp.com will change to morse.law to reflect the Firm’s new moniker. This new identity preserves our 25-year tradition and carries into the future the vision of our founding partners of a unique law firm geared to providing the services that business clients need at the highest levels of the legal profession in a flexible and collegial environment.
Department of Labor Proposes New Interpretation of Joint Employer Status Under The Fair Labor Standards Act
By: Amanda Thibodeau
On April 9, 2019, the United States Department of Labor (“DOL”) published a notice of proposed rulemaking (the “NPRM”) to amend its existing regulations regarding so-called “joint employer” status under the federal Fair Labor Standards Act (the “FLSA” or the “Act”).
The FLSA requires covered “employers” to pay nonexempt employees at least the federal minimum wage for all hours worked and overtime for all hours worked over 40 hours in a workweek. The Act also contemplates scenarios in which other “persons,” in addition to the nominal employer, may be jointly liable for wages due to an employee under the Act. This concept is generally known as joint employer wage liability (although the term “joint employer” is not specifically used in the language of the FLSA). Joint employer status under the FLSA implicates questions such as:
- Is a franchiser liable for the wage obligations of its franchisees?
- Is an institutional investor liable for the wage obligations of its portfolio businesses?
- Is a parent corporation liable for the wage obligations of its subsidiaries?
In 1958, the DOL issued regulations interpreting joint employer status under the Act. Those regulations instructed that multiple persons or entities may be jointly liable for wage obligations due to an employee if they are “not completely disassociated with” respect to the employment of an employee. This open-ended standard, which remains the current DOL benchmark on the subject, has been the subject to debate for nearly sixty years.
The DOL indicates that the purpose of the NPRM is to make the determination of joint employer status under the FLSA “simpler and more consistent.”
A New Test For Joint Liability Status
The NPRM proposes a four-factored test to determine when a person or entity shares wage liability for an employee with the nominal employer. The four factors are whether the person or business entity:
- hires or fires the employee;
- supervises and controls the employee’s work schedule or conditions of employment;
- determines the employee’s rate and method of payment; and
- maintains the employee’s employment records.
The NPRM clarifies that that “the potential joint employer must actually exercise . . . one or more of these indicia of control to be jointly liable under the Act.” (Emphasis supplied). The reserved, but unexercised, contractual right to act in relation to an employee “is not relevant for determining joint employer status.” In addition, the NPRM provides a set of examples that illustrate the limits of the four-factor test:
- The potential joint employer’s business model—for example, operating as a franchisor—does not make joint employer status more or less likely under the Act.
- The potential joint employer’s contractual agreements with the employer requiring the employer to, for example, set a wage floor, institute sexual harassment policies, establish workplace safety practices, require morality clauses, adopt similar generalized business practices, or otherwise comply with the law, do not make joint employer status more or less likely under the Act.
- The potential joint employer’s practice of providing a sample employee handbook, or other forms, to the employer; allowing the employer to operate a business on its premises (including “store within a store” arrangements); offering an association health plan or association retirement plan to the employer or participating in such a plan with the employer; jointly participating in an apprenticeship program with the employer; or any other similar business practice, does not make joint employer status more or less likely under the Act.
What’s Next?
It should be noted that NPRM is a proposal. The DOL is now soliciting comments from interested parties with respect to the NPRM, and will begin the process of developing a final rule on the subject. Whether the DOL ultimately adopts the rules proposed in the NPRM is unclear. What is clear is that the DOL is focused on clarifying standards with respect to this contentious area of employment law. Morse will continue to monitor, and report on this subject.
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Morse’s Employment Law Group regularly advises clients with respect to compliance with the Fair Labor Standards Act and its developments.
For more information, please contact Amanda Thibodeau or Matthew Mitchell.
Equal Pay Day in Massachusetts: Are you in compliance?
By: Amanda Thibodeau
April 2, 2019, is National Equal Pay Day – a date designated by the National Committee on Pay Equity to highlight inequities in wages between men and women. Equal Pay Day marks how far into the next calendar year the average American woman would have to work in order to make as much as the average American man made in the preceding year. With the recent passage of the Massachusetts Equal Pay Law, Equal Pay Day also serves as a reminder to all Massachusetts employers that they have specific legal obligations to examine, identify, and eliminate wage gaps among their male and female employees.
Read about the obligations in our Employment Law Alert.
Massachusetts Employment Law Blog 