Most Widely Flouted Law Since Prohibition?

InternshirtA high school student spoke recently  at a public event and said he was forced to work three jobs to support his family after his undocumented father was “detained” by immigration authorities.

 Is this student a candidate for a non-paying summer internship – the kind that gives students an advantage in college admissions or, if they’re already in college, educational credits or better job prospects?

 Of course not.

  And that’s just one of the problems with non-paying internships.

 The other problem is that many of these internships are a complete sham.  Technically, the Fair Labor Standards Act requires a company that does not pay interns to provide skills and opportunities that clearly benefit the interns.  The company can’t gain anything from the interns’ work. However, this  provision of the FLSA is perhaps the most widely flouted law since America banned alcohol during prohibition.

 A check of an internet job board this week found hundreds of  unpaid internship “opportunities”  from such employers as The National Republican Senatorial Committee and The Pittsburg Penguins hockey team.

Even the American Civil Liberties Union (ACLU), which says it has been “at the forefront of virtually every major battle for civil liberties and equal justice in this country” for 92 years, uses unpaid interns. 

 Interestingly, the ACLU’s  Summer 2013 Internship program seeks students to work in  “graphic design and multimedia.” Applicants should, among other things,  have digital design experience and be proficient in Adobe InDesign, Photoshop and Illustrator.

According to the ACLU ad:

 “The Graphic Design Internship offers the opportunity to gain exposure to the digital design aspect of Communications and its use to support the ACLU’s work.  Interns can expect to work on a variety of branding and key issue projects including the production of printed materials and graphics and design for the ACLU web site(s), multimedia and social media channels.”

Is the ACLU just trying to get hot young talent to work for free? 

You decide.

 Several interns have filed lawsuits in recent years claiming they were assigned to do substantive but unpaid work for the organization and/or menial tasks like doing errands and getting coffee that  conferred benefit on the organization but had no educational value. 

 Last year, former intern Lucy Bickerton filed a class action lawsuit against TV talk show host Charlie Rose. The lawsuit said Ms. Bickerton, a 2008 graduate of Wesleyan University, had various responsibilities at the show, including providing background research for Mr. Rose about interview guests, assembling press packets, escorting guests through the studio, breaking down the interview set after daily filming and cleaning up the green room. Rose and his production company settled the case by paying 190 ex-interns between 2006 and 2012  a total of up to  $250,000 in unpaid wages.

 (Obviously,  Ms. Bickerton was not represented by the ACLU. )

Test for  unpaid internship 
A for-profit institution does not have to pay an employee whose work serves only his or her own interests.  Here is the test used by the U.S. Department of Labor to determine whether a worker is a bona fide intern:

  • The internship is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff; 
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded; 
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and 
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

NOTE:  Although the ACLU calls their “interns” interns, there is an  FLSA exemption for those who volunteer for religious, charitable, civic or humanitarian non-profit organizations and individuals who volunteer to perform services for a state or local government agency..

Amazon’s Free Lunch

AmazonA recent federal court decision offers a glimpse into the miserly working conditions of hourly workers at two national distribution centers for Amazon.com in Nevada.

Two workers, Jesse Busk and Laurie Castro, filed a class action lawsuit in 2010 arguing that they should be paid for the 25 minutes it takes them to depart the Amazon distribution warehouse at the end of their shift. They said workers must stand in line for a security clearance that requires them to remove their wallets,  keys and belts and walk through a metal detector.  

Busk and Castro are former employees of Integrity Staffing Solutions, Inc., which provides warehouse space and staffing to Amazon.com in Fernley and Las Vegas.  

The workers also argued they should be paid for their 30-minute lunch break because they had to pass through a security clearance when they left the factory floor and it took ten minutes to get to and from the cafeteria.  Also, they said, supervisors frequently “reminded” them during the lunch period to “finish their meal period quickly so that they would clock back in on time.”  

An appeals court panel ruled on April 12 that the Fair Labor Standard Act (FLSA) requires workers to be compensated for the time spent undergoing the security clearance at the end of their shift but does not require compensation for time deducted from their 30-minute lunch break.

In Busk, et al v. Integrity Staffing Solution ,a three-judge panel for  U.S. Court of Appeals for the Ninth Circuit said the time the spent on the security clearance at the end of the day was necessary to employees’ primary work as warehouse employees filling orders placed through Amazon.com. Also, the panel wrote,  “Integrity allegedly requires the screening to prevent employee theft, a concern that stems from the nature of the employees’ work (specifically, their access to merchandise).”

 However, the appeals court panel ruled the workers’ lunch-break time was not compensable under the FLSA because it was not integral and indispensable to the workers’ principal activity of filling orders placed through Amazon.com.  

The panel contended that any time spent by workers going through the security clearance during the lunch break was “de minimus” or too inconsequential to require compensation.   The panel noted that employees claimed they were required to pass through the security check only on their way to the cafeteria and “not on the return trip. The relatively minimal time expended on the clearance in this context differs from the 25-minute delay alleged for employees passing through security at day’s end.”

Finally, the panel writes, “That supervisors may have ‘interrupted’ Busk and Castro …  does not make their lunch periods compensable absent any claim that they performed a work duty.”

While throwing out the federal FLSA claim, the appellate panel did say the workers’ could raise a state law claim they asserted in the appeal with respect to their shortened lunch period.  The plaintiffs argued that workers have greater protection under a Nevada law that requires that an employer provide a half-hour meal break if it employs a worker for a continuous eight-hour period.

The panel reversed a lower court’s pre-trial dismissal of the case and remanded the case back to the district court for further consideration.   

The panel noted that Busk and Castro did not claim the walk to and from the cafeteria deprived them of adequate time to eat lunch.  “We express no view on whether such a claim is cognizable under FLSA, nor on whether the plaintiffs could amend their complaint to state a valid claim under FLSA. We leave that to the district court’s consideration on remand,” the panel states

 

Wage Theft Goes Unpunished

If you rob a liquor store and get caught, you may serve time in prison.

But nothing much happens when an unscrupulous employer steals money from an employee’s paycheck.

That’s the sad conclusion of a national report recently released by the Progressive States Network (PSN), entitled,  Where Theft is Legal: Mapping Wage Theft Laws in the 50 States.

The PSN report finds that state laws are grossly inadequate to combat the epidemic of “wage theft” by unscrupulous employers in the United States. Some states levy no fines at all for wage theft, according to the report, while most others invoke penalties smaller than a speed­ing ticket.

 Wage theft is the systemic non-payment of wages that owed to workers.

The PSN estimates that more than 60% of low-wage workers suffer wage violations each week. On average, the PSN reports, low-wage workers lose $51 per week to wage theft, or $2,634 per year.  For low-wage workers, that amounts to 15% of their annual income, at average earnings of $17,616 per year.

The problem also costs states millions of dollars each year in lost revenue.  Yet, according to PSN, the vast majority of states have few, if any, protections against wage theft.   “Our comprehensive survey of state laws … reveals that 44 of the 50 states (plus Washington, DC) do not receive passing grades on combat­ing the wage theft epidemic,” states the PSN report.

Even states that ranked highly in the PSN survey –  New York and Massachusetts –  received barely passing grades.

Two states — Alabama and Mississippi — scored zero points in the survey, indicating they essentially offer workers no protection at all against wage theft.

Wage theft typically occurs when employers misclassify workers as exempt employees under federal or state wage and hour laws to avoid paying overtime. For example, a cashier may be called a manager even though he or she has no management duties.. Or employers fail to pay workers the minimum wage or cheat them of earned benefits.  Subcontracting employers often try to shirk their responsibilities under wage-and-hour law by claiming that a temp agency or another inter­mediary is actually the sole employer responsible for wage payment.

The PSN reports the ability of the federal and state governments to enforce wage and hour laws has sharply declined in recent years.

The U.S. De­partment of Labor (USDOL) has only one enforcement agent for every 141,000 workers, down from one per 11,000 workers in 1941.  The PSN reports that state revenue shortfalls and layoffs have resulted in less than 15% of the enforcement coverage offered by state agencies several decades ago.

In 2008, the National Employment Law Project (NELP) and a team of advocates, policy groups, and academic research centers surveyed workers in Chicago, Los Angeles and New York and  found:

  •  64% of low-wage workers experience wage theft each week.
  • 26% are paid under the legal minimum wage.
  • 76% of workers owed overtime go unpaid or underpaid.

Since the NELP report, New York passed the Wage Theft Prevention Act of 2010, which is considered to be the strongest state law in the country, with beefed up anti-retaliation provisions, requirements for notification, and a remedy that allows workers to recover damages.

Founded in 2005, the PSN provides coordinated research and strategic advocacy tools to state legislators and their staffs, empowering these decision-makers to adopt progressive policies.