By: Marty Heller and Michael Hill
The Eleventh Circuit Court of Appeals has dramatically modified the test to determine whether an “intern” is an employee. In Schumann v. Collier Anesthesia, P.A., --- F.3d ---, No. 14-13169, 2015 WL 5297260 (11th Cir. Sept. 11, 2015), students who were required by Florida law to complete a clinical internship to become licensed as certified registered nurse anesthetists sued because they were not paid for doing so. In the lawsuit, they argued that they were actually “employees” under the Fair Labor Standards Act (“FLSA”) and therefore entitled to minimum wage and overtime pay. The Eleventh Circuit expressly rejected the test preferred by the students and long used by the Department of Labor (“DOL”) for determining whether a person is an intern or an employee. The lower court was instructed to apply a new test that takes a much more moderate approach to an internship that is required for many academic degrees and professional licensures and certifications.
The Eleventh Circuit directed the lower court to consider the extent to which:
1. 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.
2. 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.
3. The internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Notably absent is any requirement that the employer derive “no immediate advantage” from the intern’s activities, which was central to the DOL’s test for interns.
There is no way to know in advance whether the students in Schumann will be allowed to proceed with their claims; the trial court may well reach the same decision under the new test and dismiss the case again. But one thing for certain is that employers who offer internship programs need no longer fear the DOL’s outdated criteria for when those interns should be paid, at least in the Second and Eleventh Circuits. Hopefully, more courts will get on board.