Welcome to the Employment Law section of our webpage. Employment law issues are complex, often subject to state and local law (not ordinarily covered on CLIC pages) as well as federal law. This front page will reflect our most current information on employment law affecting educational institutions.
Shulman et al v. Collier Anesthesia and Wolford College, Case No. 14-13169, (C.A. 11) Sept. 11, 2015.
This is a case on whether or not nursing students who are already RNs and who perform internships as part of a Master's Degree must be paid (and receive overtime) for their clinical internships under the FLSA. The case begins as follows:
Upon receiving their master’s degrees, certifications, and licenses, Plaintiff Appellant student registered nurse anesthetists are legally able to put people to sleep. We have heard, though never ourselves experienced, that some legal opinions can do the same thing. We are hopeful that this one will not.
The district court considered the DOL six factor test and found the nurses not to be employees. The CA found the test used by the lower court to be outdated and not adequate for determining the primary beneficiary of a "modern-day internship for academic credit and professional certification."
The facts in this case were unique. Wolford College is a for profit college wholly owned by Lynda Waterhouse, who is also the Executive Director of Collier Anesthesia. The last four semesters of the program are mainly clinical experience. In the case, some, if not all of the clinical education was obtained at Collier Anesthesia Facilities. The students submitted evidence they were routinely scheduled to work for more than 40 hours per week.
The Court of Appeal cited Glatt, 791 F. 3rd at 384, which is the 2nd Circuit's reflection on the limitations of comparing modern internships to the facts in the Portland Terminal case, which is the 68 year old case that is the basis for the test in the DOL handbook. The CA found long term intensive modern internships to be substantially different from the short term training class offered by the railroad in Portland Terminal.
The Court of Appeals opined the best way to determine the primary beneficiary is to focus on the benefits to the student while considering the manner in which the employer implements the internship program, and whether or not it takes unfair advantage of the student. The factors cited in Glatt were repeated here with approval. This is a seven factor test:
The extent to which the intern and the employer clearly understand that there is no expectation of
compensation. Any promise of compensation, express or implied, suggests that the intern is an
employee —and vice versa.
The extent to which the internship provides training that would be similar to that which would
be given in an educational environment, including the clinical and other hands-on training provided
by educational institutions.
The extent to which the internship is tied to the intern’s formal education program by integrated
coursework or the receipt of academic credit.
The extent to which the internship accommodates the intern’s academic commitments by
corresponding to the academic calendar.
The extent to which the internship’s duration is limited to the period in which the internship
provides the intern with beneficial learning.
The extent to which the intern’s work complements, rather than displaces, the work of
paid employees while providing significant educational benefits to the intern.
The extent to which the intern and the employer understand that the internship is conducted without
entitlement to a paid job at the conclusion of the internship.
The case was remanded to the district court for further proceedings.
Pay Transparency Final Rule Implementing Executive Order 13665, 80 Fed. Reg. 54934, Sept. 11, 2015: The Pay Transparency Executive Order amends EO 11246 and the EO Clause to prohibit policies and practices which prevent applicants and employees from freely discussing their pay. It is applicable to employers with federal contracts or subcontracts over $10,000 entered into or modified after Jan. 11, 2016.The rule allows job applicants and employees of federal contractors and subcontractors to file a discrimination complaint with OFCCP if they believe that their employer fired or otherwise discriminated against them for discussing, inquiring about, or disclosing their own compensation or that of others.
The rule does not require disclosure by the Employer to employees about pay of their co-workers, but it does prohibit retaliation against employees who ask, discuss or disclose compensation of an employee or applicant. A Pay Transparency Policy Statement must be included in employee handbooks and given to employees or posted where employees can see it. The EEO is the law Poster will be updated. See Jackson Lewis Sept. 18, 2015 Affirmative Action and OFCCP Law Advisor article by Laura Mitchell. The idea of transparency is to decrease the pay gap between men and women. Employees who have access to pay information as part of the essential function of their job are still bound to keep it confidential, and cannot disclose. See also the 9-10-15 DOL News Release on the final rule.
Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Proposed Rule, 80 Fed. Reg. 38515, July 6, 2015.
Currently, employees who are paid over $455 per week ($24,660 per year) and who perform executive, administrative, professional, or computer professional type work are not required to receive overtime pay. The Department proposes to set the standard salary level equal to the 40th percentile of earnings for full-time salaried workers -$921 per week, or $47,892 annually for a full-year worker.
Certain highly compensated employees are exempt from the overtime pay requirement if they are paid total annual compensation of at least $100,000 (which must include at least $455 per week paid on a salary or fee basis) and if they customarily and regularly perform at least one of the exempt duties or responsibilities of an executive, administrative, or professional employee identified in the standard tests for exemption.The Department is also proposing to set the highly compensated employee annual compensation level equal to the 90th percentile of earnings for full-time salaried workers ($122,148 annually versus the current $100,000 per year).
Along with physicians, lawyers and professors, exempt employees also includes those engaged in academic administrative functions if they meet the salary level (now at least $455 weekly) and the salary basis test (predetermined fixed salary).The primary duty must be administrative functions directly related to academic instruction or training in an educational establishment, which must include exercising discretion and independent judgement with respect to matters of significance. "In general, the exercise of discretion and
independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.) (NACUA paper 2011)
An academic administrator would include department heads and academic counselors. Executive assistants may be exempt employees, if delegated genuine authority.
See 29 USC §541.204. Also exempt are educational administrators, meaning those who plan, direct, or coordinate research, instructional, student administration and services, and other educational activities at postsecondary institutions. Admissions counselor who exercise independent judgment in selecting students may also qualify.
Computer employees who write software code, design system architecture, or design databases are also exempt.
The proposed rule also proposes automatically adjusting the minimum salary requirements annually, either by using a fixed percentile of wages or the consumer price index. For more information see the Wage and Hour Division Fact Sheet.
CUPA HR Letter (dated September 4, 2015) submitted in comment on the July 6, 2015 proposed changes to the exemptions from overtime pay requirements for white collar employees.
FLSA Test on Independent Contractors: Administrator's Interpretation No. 2015-1, Issued July 15, 2015*
Possibly issued in connection with the rise of new business models, such as Uber, this is a DOL test for summarizes the position DOL's Wage and Hour division has taken in entering into agreements with states and the IRS on how to handle Employer misclassification. The heart of the DOL position is stated here, and focuses on more than control, which is the heart of the IRS /common law test. The end result is that a worker dependent for economic survival on the employer will be an employee, and a person in business for him or herself will be an independent contractor.
In order to make the determination whether a worker is an employee or an independent contractor under the FLSA, courts use the multi-factorial “economic realities” test, which focuses on whether the worker is economically dependent on the employer or in business for him or herself. A worker who is economically dependent on an employer is suffered or permitted to work by the employer. Thus, applying the economic realities test in view of the expansive definition of “employ” under the Act, most workers are employees under the FLSA. The application of the economic realities factors must be consistent with the broad “suffer or permit to work” standard of the FLSA.
Northwestern University and College Athletic Players Association (CAPA), Petitioner, Case 13-RC-121359 (August 17, 2015) (Decision by NLRB, upon review and order)
In March 2014, a Regional Director held the grant in aid scholarship football players at Northwestern were employees within Section 2(3) of the NLRA. Northwestern appealed, and the NLRB reversed, holding that the Board would decline jurisdiction as involvement in this case would not improve stability in labor relations. The NLRB noted Northwestern is a private school, while the rest of the Big Ten are public, and emphasized this was a unique case
See Glatt et al v. Fox Searchlight Pictures, et al. (C.A. 2nd Cir.) July 2, 2015. Interns who were unpaid and who were asked to perform a number of tasks unrelated to an educational purpose sued over the lack of pay. The court declined to grant deference to the DOL Fact Sheet 71, noting as follows:
We decline DOL’s invitation to defer to the test laid out in the Intern Fact Sheet. As DOL makes clear in its brief, its six part test is essentially a distillation of the facts discussed in Portland Terminal. DOL Br. at 11, 12, 21.
Unlike an agency’s interpretation of ambiguous statutory terms or its own regulations, “an agency has no special competence or role in interpreting a judicial decision."
State of N.Y. v. Shalala, 119 F.3d 175, 180 (2d Cir. 1997).