Worthy exemption

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Worthy Exemption? Examining How the DOL Should Apply the FSLA to Unpaid Interns and Public Agencies Author: Anthony Tucci Presented by Sally Perez-Ramos

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Transcript of Worthy exemption

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Worthy Exemption?Examining How the DOL Should Apply the FSLA to Unpaid Interns and Public Agencies

Author: Anthony Tucci Presented by Sally Perez-Ramos

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The Backstory

1938 - Creation of the Fair Labor Standards Act 1947 - Walling v. Portland Terminal Co.

Prior to 1943, trainees were not compensated for their time spent with the employer

Because it was seen the trainee may impede or interfere with the productivity of yard crew and did not aid in the business production, trainees were seen as a nuisance

When the individual’s training was completed and they were held competent for employment, their application was submitted and they were called in when work was available

According to the DOL – trainee is not an employee and thus court held no provision requiring employers to provide pay

This lead to the creation of the Six Part Test for Trainees and Unpaid Interns at For-Profit Organizations .

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Six Prong Test to FSLA

The training, even though it includes actual operation of the facilities of the employer, I similar to that which would be given in a vocational school;

The training is for the benefit of the applicants;

The trainees do not displace regular employees, but work under close supervision;

The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion his operations may be actually impeded;

The trainees are not necessarily entitled to a job at the conclusion of the training period; and

The employer and trainees understand that the trainees are not entitled to wages for the time spent in training

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Tony & Susan Alamo Foundation v Secretary of Labor

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FLSA & Unpaid Interns at Nonprofits Though the FLSA does provide detailed exemptions to nonprofit

organization, there are some rules to hosting unpaid interns:

Enterprise and the use of ordinary

commercial activities

Determining whether the

intern is engaged in commercial

activities

Finding out if the intern is

economically dependent on the

organization

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Public Agencies: The Exception to the Rule

1995 - Congressional Accountability Act Legislation created requiring a variety of civil rights,

labor, and work place and health laws to be applied to Congress and its associated agencies just as applied to business and the federal government

Exemption: Congressional Interns

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Benefits of Unpaid Internships for Nonprofits and Public Agencies

Help decide on career path Create a professional network Provides real-world work experience Social mobility for low income

students

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The Sours

Hurts the economy by: Displacing employees Menial tasks Depress future and starting earnings

Affects the psyche, discourages against exercising employment rights Getting paid is seen as a privilege

Damages low income/minority students’ social mobility Exclude minorities and low income students opportunity to apply

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Author’s Solution for Nonprofits “The DOL should apply the Portland Terminal test to

nonprofits and public agencies, with additional criteria: A student qualifies as a bona fide unpaid intern when he or she completes work that is typically associated with public-service volunteerism, the task compromise only a minority of the internship in a given work week, and this work is motivated by civic or humanitarian purposes” (Tucci, 2011, p. 1384)

If modified, nonprofits could receive immediate advantage rather than no advantage thus the FLSA could cover the intern

Modification will ensure student receives benefits and would compel nonprofits to be treated as for-profits

Author states this will reduce unpaid internships and help the economy

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Author’s Solution for Public Agencies

Modify the 6 part Portland Terminal test Note: There is a section in the FLSA which allows public

agency interns to displace regular employees and receive immediate advantage

Tucci suggests adopting a test which will encompass the idea “primary beneficiary is the intern”

In addition to the modified exemption test, a test of employee status for public sector interns should satisfy prongs 1, 2, 5, and 6 and thus ridding unpaid internships

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My Thoughts

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References

Tucci, A. J. (2011). Worthy Exemption? Examining How the DOL Should Apply the FLSA to Unpaid Interns at Nonprofits and Public Agencies. Iowa Law Review, 97(1363), 49. Retrieved from http://ssrn.com/abstract=1839831