Memorial Day weekend has passed, the Major League Baseball season is in full swing, and summer is upon us. With apologies to Roger Kahn, for us wage and hour practitioners, the “Boys of Summer” (and girls!) are the wave of workers joining employer workforces for the next few months. Whether they are interns in your office, lifeguards at your pools and beaches, or the thousands of seasonal hospitality and service workers joining payrolls, if you are adding staff this summer, it’s time for our annual summer reminders.
Complete Form I-9 for Every Worker
Employing seasonal workers does not get you out of this obligation. Not only do you have to complete the form, you have to complete it on time (best practice: before the employee starts work), and you have to complete it exactly as the instructions require. The Form I-9 process is highly technical and full of traps for the unwary employer, and summertime adds even more risks, since the influx of workers can often mean that supervisors and managers with no training are completing I-9s, while others might simply fall through the cracks. I-9 compliance is a challenge in any industry, but especially so in service industries with large immigrant workforces and seasonal staffing. Regularly conducting audits and training staff can help avoid harsh penalties that can range anywhere from up to $1,100 per employee for simple, technical errors to as much as $16,000 per employee for more serious violations. In my experience assisting clients with business immigration matters and I-9 audits, I have seen even the most well-meaning and sophisticated employers (including those with completely legal workforces) get hit with significant fines simply due to technical non-compliance with their I-9 obligations.
Look Again at Whether you Have to Pay Your Summer Interns
Last year, my colleague Mark Wilkinson offered a great overview of the six-factor test that the Department of Labor (DOL) uses to determine whether an internship qualifies as unpaid under the Fair Labor Standards Act. It is worth another look.
Public and non-profit entities still have some latitude here, but private, for-profit businesses’ opportunities to create unpaid internships have shrunk considerably. Given the continued focus by the DOL on this area, and the interest that the issue has drummed up from the plaintiff’s bar, now is a good time to take a hard look at whether your unpaid internship programs still qualify under the DOL’s six-factor test. Particularly because programs change from year-to-year, you need to evaluate your programs each summer to avoid problems. Like other employees (or misclassified contractors), interns cannot contract away their rights under the FLSA or state wage and hour laws. An internship agreement or acknowledgement form tailored to the factors in the test is a good start, but it isn’t enough on its own, even if you and the intern agree. If you have come to rely on substantive contributions and benefits of work from interns each summer or during school semesters, you will likely have a hard time justifying your internship program as unpaid, even if you think every other employer in the industry does the same thing.
Don’t ruin your business’s summer with wage and hour violations! And, oh, go Tigers!