On February 4, 2021, Nick Reiter was quoted in Law360 on the legal landscape surrounding employment classification for interns. According to the article, the nation's leading intern advocacy group is calling on President Joe Biden's administration to develop stricter standards around unpaid internships, warning that the economic effects of the COVID-19 pandemic could exacerbate problems of worker misclassification.
The group also wants the Department of Labor to take another look at guidance the agency put out in 2018 during former President Donald Trump's administration, which rescinded previous advice from 2010 and embraced a standard focusing on whether the intern or their employer is the "primary beneficiary" of the relationship. That standard is based on a seven-factor test for determining interns' status that was laid out by the Second Circuit in 2015 and has since been adopted by other federal appeals courts.
Given the status quo, employers should create an internship agreement that spells out how the internship will fulfill the factors of the primary beneficiary test, said Reiter. Those factors include whether there's a clear understanding that no expectation of compensation exists, whether interns receive training similar to what they'd get in an educational environment, and the extent to which the internship is tied to a formal education program, among others.
"It shouldn't be that the intern is just showing up from 9 to 5 and putting their head down and toiling away," Reiter said. "They should really be taking a hard look at how much of the internship are those menial tasks and how much of the internship is more substantive work."
Reiter said employers bringing on unpaid interns should be particularly cautious, considering the many minimum wage increases taking place this year in states across the country — and possibly at the federal level. "If the minimum wage is raised, then the cost of getting this wrong can be a lot higher," Reiter said.
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