Jennifer Prozinski was quoted in USAE on January 29, 2018, about the new Department of Labor's guidance regarding nonprofits paying or not paying interns. On Jan. 5, DOL discarded the stringent test to determine whether an intern is an "employee" under the Fair Labor Standards Act (FLSA) in favor of the more flexible "primary beneficiary" test utilized by numerous federal courts.
Ms. Prozinski said, "There is no 'bright-line' test for determining whether the nonprofit or the intern is the primary beneficiary of the internship. Rather, each internship should be evaluated on a case-by-case basis, taking into consideration and weighing all the factors set forth in the DOL new test. The greater the number of factors that are met, the greater the likelihood."
"A circumstance may present itself in which, an organization is paying an intern because the internship failed to satisfy all six requirements of the former DOL intern test," said Prozinski.
"After an evaluation of the internship under the primary beneficiary test, an organization may determine the intern, not the organization, is the primary beneficiary and thus, the internship may be unpaid. Even if the nonprofit determines the internship may be unpaid, to avoid potential contractual claims, it is recommended that a nonprofit does not cease payment mid-internship. Said differently, future, rather than current, internships may be unpaid if the nonprofit determines the intern is the primary beneficiary."
Ms. Prozinski said, "There is no 'bright-line' test for determining whether the nonprofit or the intern is the primary beneficiary of the internship. Rather, each internship should be evaluated on a case-by-case basis, taking into consideration and weighing all the factors set forth in the DOL new test. The greater the number of factors that are met, the greater the likelihood."
"A circumstance may present itself in which, an organization is paying an intern because the internship failed to satisfy all six requirements of the former DOL intern test," said Prozinski.
"After an evaluation of the internship under the primary beneficiary test, an organization may determine the intern, not the organization, is the primary beneficiary and thus, the internship may be unpaid. Even if the nonprofit determines the internship may be unpaid, to avoid potential contractual claims, it is recommended that a nonprofit does not cease payment mid-internship. Said differently, future, rather than current, internships may be unpaid if the nonprofit determines the intern is the primary beneficiary."