Interns – A Benefit or a Liability – Update

Last week, on April 28th a Federal appellate court issued a decision on whether students working in a school affiliated nursing home should be considered employees.  The court’s ruling disregarded the Department of Labor’s six factor test about whether an student serving an internship should be classified as an employee.  Last June, I wrote an article about the six factor test titled Summer Interns A Benefit or a Liability.   

The court in Solis v. Laurelbrook Sanitarium said a different analysis should be used.  The court said “We find the WHD’s test to be a poor method for determining employee status in a training or educational setting. For starters, it is overly rigid and inconsistent with a totality-of-the-circumstances approach, where no one factor (or the absence of one factor) controls.”

The court focused on who receives the primary benefit – the intern or the business.  To make that determination who receives the primary benefit,  “Factors such as whether the relationship displaces paid employees and whether there is educational value derived from the relationship are relevant considerations that can guide the inquiry. Additional factors that bear on the inquiry should also be considered insofar as they shed light on which party primarily benefits from the relationship.”

For people using interns, the good news is that you don’t have to meet all six factors in Department of Labor test.  However, in looking at all the circumstances the experience needs to be a greater benefit to the student rather than to the business.

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