Gallet Dreyer & Berkey, LLP | Three Commonly Asked Wage and Hour Law Questions
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Three Commonly Asked Wage and Hour Law Questions

04/07/2012 | Spring 2012 Newsletter
The following are answers to three commonly asked wage and hour law questions, for New York employers: 

1. Can I use unpaid interns?
Yes, but only in very narrow circumstances, where the intern is truly being used to provide training for the benefit of the intern and not to do work that would otherwise be done by a paid employee.

Employers need to be particularly careful, because government regulators have indicated they are interested in increasing enforcement action in this area, and plaintiffs’ lawyers have been busy filing private class action lawsuits. In March this year, a class action lawsuit was filed in New York federal court against magazine publisher The Hearst Corporation for allegedly using unpaid interns as messengers, delivery people, assistants and secretaries. And last fall, a class action lawsuit was filed in New York federal court against Fox Searchlight Pictures for allegedly using unpaid interns to perform the work of bookkeepers, production assistants, secretaries and janitors on their films.

U.S. Department of Labor guidelines provide that an employer cannot use an unpaid intern — without violating the minimum wage laws — unless all of the following factors are met: 1) the trainee is receiving training similar to what the trainee would receive in a vocational school or academic program; 2) the trainee does not displace regular employees; 3) the training is for the benefit of the trainee; 4) the employer derives no immediate advantage from the trainee’s activities, and on occasion the trainee may actually impede the employer’s operations; and 5) the trainee understands he/she is not necessarily entitled to a job at the end of the training, and that the program is unpaid.

The third and fourth factors are the ones that are most commonly overlooked by employers, and most likely to cause potential legal problems.

The guidelines explain, “if the workers are engaged in the primary operations of the employer and are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits is unlikely to make them trainees given the benefits received by the employer.”

On the other hand, the guidelines explain, “if the employer is providing job shadowing opportunities where the worker learns certain functions under the close and constant supervision of regular employees, but performs no or minimal work, this type of activity is more likely to be a bona fide training program.”

New York Department of Labor guidelines impose additional requirements. They require that: 1) training must be performed under the supervision and direction of people who are knowledgeable and experienced in the activity; 2) interns may not receive employee benefits such as insurance; 3) the training must provide the intern with skills to work in any similar business, and not just the employer offering the program; and 4) advertisements for the position must clearly focus on education or training elements, and not on employment.

2. Are employers required to provide a certain number of paid sick days, vacation days, or a certain amount of breaks?
There is no legal requirement to provide an employee with any number of paid sick days or vacation days, assuming an employee is non-union and does not have any written employment agreement which addresses the issue. Of course, if there is an announced policy, it should be followed in a non-discriminatory manner.

Also, if the company has 50 or more employees, the employer is required under the federal Family and Medical Leave Act to provide up to 12 weeks of unpaid medical leave each year to employees who have been working for the company for at least one year.

Regarding breaks and meal periods, for non-factory employees working more than six hours during a normal workday (starting in the morning and ending before 7 p.m.), New York law only requires a half hour break sometime between 11 a.m. and 2 p.m. No other breaks or rest periods are legally required.

3. Do employers have to give any notice or pay any severance to a terminated employee?
No. An employer is not legally required to give any advance notice or pay any severance to a terminated employee (assuming that the employee is an “at-will” employee, there is no union agreement, and there is no written employment agreement which addresses the issue).

Nevertheless, even though it is not legally required, offering severance can be useful for a number of reasons, including maintaining good morale for remaining employees, and offering something in return for asking the employee to sign a release.