This is a brief update to the court machinations in the DOL’s appeal of the Texas Court’s decision to issue a preliminary injunction barring the implementation of the Final Overtime Rule. That appeal is now before the Court of Appeals for the Fifth Circuit, generally known as an employer-friendly circuit.

Fall is upon us and the holiday season will soon follow. Along with the joy of this special season often comes requests from civic groups to partner with for-profit companies for fundraising or other charitable purposes. For example, the local Rotary Club might request that its members serve as your restaurant’s wait staff for a night with all tips and donations going to a charity of its choosing; or a charitable organization may offer to assemble your company’s mass mailings in exchange for a donation.  For-profit organizations must, however, carefully consider the Fair Labor Standards Act prior to using volunteers. Because, if a court or the Department of Labor (“DOL”) deems that a volunteer actually performed the services of an employee, that person must be paid at least the minimum wage and overtime if applicable under the FLSA. (more…)

The Department of Labor’s (“DOL”) six-factor test has long been the incontrovertible standard for determining whether employers are required to pay an intern under the Fair Labor Standards Act. That may no longer be the case after the Second Court of Appeals’ decision earlier this month in Glatt v. Fox Searchligh Pictures, Inc., Nos. 13-4478-cv, 13-4481-cv (2d Cir. July 2, 2015). In Glatt, three graduate students alleged the film company violated the FLSA by not paying them minimum wage or overtime when it allowed them to work as unpaid interns. (more…)

Three and a half years ago, litigation began in the Southern District of New York (“S.D.N.Y.”) challenging the long-held assumption that interns were not “employees” under the law. These cases alleged that interns who were not paid were nevertheless entitled to minimum wage and overtime under the FLSA. Because these lawsuits enjoyed some initial success, and because unpaid internship programs were commonplace throughout the country, several copycat lawsuits were filed thereafter, establishing a significant new trend in wage & hour litigation. This tidal wave of new cases has subsided in the last three years, as most of the intervening lawsuits have been settled. But the original cases from the S.D.N.Y. are still being litigated and are currently on appeal to the Second Circuit. The lead cases have been consolidated and a decision is expected shortly. Whatever the outcome may be, that decision will likely bring clarity to the proper classification of interns. There is already a split among the Circuit Courts of Appeal, which mean the United States Supreme Court may take up this issue next term. Until then, employers should take preventative measures to avoid liability for unpaid interns. (more…)