California Employment Law : Employment Lawyer & Attorney : Fox Rothschild Law Firm : San Francisco, Oakland, Los Angeles, San Diego

I just had the pleasure of attending the Cornell HR in Hospitality Conference in Las Vegas, with my colleagues Carolyn Richmond, Alka Bahal, and Rachel Silverstein. I participated in the Executive Summit and shared ideas with some of the most progressive minds in the hospitality industry. Here is my top ten list of take-aways:

1. Rather than thinking of employment “at-will,” just think of it as employment of “free will.”

2. Just because you call someone an intern, does not mean you can not pay them minimum wage regardless of whether they are getting class credit, lawsuits by interns are on the rise.

3. Even Wall Street has learned that management trainees are not exempt, at least for the first six months of their tenure (if not longer).

4. To make sure employees are engaged and productive as the economy improves, don’t just conduct exit interviews, but also conduct periodic “stay interviews.”

5. Employee “opinion” surveys are outdated; the new approach is employee “engagement” surveys.

6. The unemployed may be a new protected category, so watch out for any blanket rule prohibiting hiring of individuals with employment gaps on their resume.

7. When responding to agency charges (EEOC or DFEH), do not attach your entire handbook or full policies, just attach excerpts; the agencies are now scrutinizing policies and looking for fault.

8. There is no such thing as an “automatic gratuity” (such as for a party of 8 or more); if it is not discretionary then it is a service charge, which means that it is included in the regular rate for overtime and sales tax calculations.

9. Employers who want to hire attractive people to service clubs and bars are creating job descriptions that require performances during the shifts, such as dancing or walking down a catwalk.

10. The new I9 form must be used by May 7th, so start using it now, and make sure you train the employees responsible for filling it out. There are many traps for the unwary and even minor violations can be costly. See Alka Bahal’s blog post for tips.
 

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It is starting to feel like summer, with graduation dates on the calendar, long daylight hours, and plenty of high school and college students and recent graduates looking for resume-building work experiences. However, before you bring on any unpaid interns this summer – beware. There has been a recent flurry of lawsuits by interns claiming to be misclassified and seeking unpaid wages.

Attached is a particularly good article by Josh Sanburn at Time summarizing two recent lawsuits by interns in the entertainment and publishing industries (pdf).

While counter-intuitive, interns aren’t supposed to really be helpful to your business; rather they are supposed to learn from you. As the Department of Labor puts it, an employer is not supposed to derive any immediate advantage from the intern, and they can’t displace your regular employees. Also, while California’s DLSE still suggests that an intern be part of some accredited school program, that one fact alone is certainly not sufficient to qualify someone for intern status.

By the way, nothing prevents an employer from calling someone an “intern,” hiring them for a limited period of time, and paying that person minimum wage. In fact, that is often a very viable option.

Bottomline, just because everyone else does it, and has done it for years without getting sued, doesn’t make it’s okay, and doesn’t protect your company from being the next class action headline.
 

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We have discussed internships before.  And recently the DLSE amended its view.  To avoid wage & hour problems, internship programs should adhere to these rules:

The training, even though it includes actual operation of the employer's facilities, is similar to that which is given in a vocational school.

The training is for the benefit of the trainees or students.

The trainees or students do not displace regular employees, but work under their close observation.

The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, the employer's operations may even be impeded.

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

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

Basically, the DLSE tightened its focus of this issue by dropping the previous "11 factor" test. 

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Caveat emptor is the rule of thumb in any marketplace. But nowhere is this bit of wisdom more true than on Craigslist. You can get pretty much anything through Craig. And that's the problem. One issue we have noticed is the rise of internship offerings. These jobs promise lots of intangibles:

"You are serious about pursuing a career in PR – that’s why you seek an internship. If you give us your all, we’ll guarantee you one of the most exciting experiences of your college years. We’ll also give you support to speed your post-college success in a number of ways, ranging from experience and skills development through introductions, references and referrals."

But the Division of Labor Standards Enforcement (DLSE) says not so much. It has developed the following internship guidelines. And they require that in order to be exempt from the wage and hour requirements of the IWC Orders, the intern’s training must be an essential part of an established course of an accredited school or of an institution approved by a public agency to provide training for licensure or to qualify for a skilled vocation or profession. Also, the program may primarily benefit the employer, a regular employee may not be displaced by the trainee, and the training must be supervised b y the school or a disinterested agency. Otherwise, any time spent interning (even time spent giving less than one's all) will be considered “hours worked” notwithstanding any ancillary excitement, experience, or introductions that may be provided. 

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