Spring is here, and along with the change in season comes a flurry of graduation announcements, parties and for employers, an upsurge of applications and resumes from recent high school and college graduates. Recent graduates and interns provide a wealth of talent for many employers, and often become a core part of their operations and strategy. However, there are employment law considerations that must be understood by a company’s HR representative, and really, everyone involved in the hiring process, when advertising, hiring and determining wages for spring hires.
Advertising for talent
Recently, the U.S. Equal Employment Opportunity Commission (EEOC) issued an Informal Discussion Letter which opined that employers who require high school diplomas as a minimum standard for job applicants, and who often advertise as such, could be in violation of the Americans with Disabilities Act, because they are screening out individuals who are unable to graduate because of a learning disability. Though Informal Discussion Letters only give guidance on a particular inquiry, and are not binding precedent, the letter is a wake-up call for employers who have long considered a high school diploma to be a minimal, achievable and useful standard to ensure that its workforce possesses basic reading, writing and math skills.
According to the EEOC Letter, an employer may still apply the high school diploma requirement (and presumably other degree requirements) if it can demonstrate that the requirement is “job-related and consistent with business necessity,” which essentially requires a showing that the functions of the particular job position cannot easily be performed by someone who does not have a high school diploma. For example, for a legal secretary, who must possess significant reading, writing, word processing and math skills to perform his or her job, a high school diploma requirement may be deemed “job related and consistent with business necessity,” but the same may not be true for a grocery bagger, hair stylist or delivery driver, who may not utilize the same skills taught in high school as a part of his or her job functions.
In light of this letter, and the reality that the EEOC may soon be inclined to apply this new position in the right case, it is prudent for employers to take another look at its job advertisements and applications to determine: (1) whether a high school diploma is actually essential to the job position; (2) what skills taught in high school are actually required for the position; and (3) how they can revise their job advertisements and applications to reflect the skill requirements necessary to the particular job, rather than a threshold diploma requirement. It is also advisable to retrain management to ensure that they are not discriminating against applicants with learning disabilities who can still perform the essential job requirements with or without reasonable accommodation, but who have not been able to achieve a high school diploma. While an employer is not required to prefer the learning disabled applicant over other better qualified applicants, it must consider the applicant’s true ability to perform essential job functions through demonstration of skills, work history considerations, etc., in lieu of a strict high school diploma requirement.
To pay or not to pay
Interns are often a valuable resource for employers — from high-school-aged technical school interns to college students trying to gain experience in their chosen field to law school students trying to gain valuable exposure to the practice of law — and in this still tender economic climate, many may be willing to work for free in exchange for a resume boost. However, it is important to consider whether this too-good-to-be-true deal could put your company at risk.
Pursuant to the Fair Labor Standards Act (FLSA), individuals who “suffer or [are] permit[ted]” to work must be compensated for the services he or she performs for an employer. More often than not, interns — at least in the “for profit” public sector, and sometimes in the nonprofit realm — must be paid at least minimum wage, plus overtime compensation above 40 hours per workweek. When determining whether your intern position requires compensation, the overarching determination is whether the intern will be serving his or her own interest in receiving training or instruction, or benefitting the employer.
Six questions have been deemed applicable to this determination, and include:
• Is the internship similar to training that would be given in an educational environment?
• Is the internship experience for the benefit of the intern?
• Does the intern displace regular employees?
• Does the employer derive immediate advantages from the activities of the intern?
• Is the intern entitled to a job at the conclusion of the internship?
• Does the intern understand that he or she is not entitled to wages for the time spent in the internship?
Regarding the first criteria, if the internship occurs in a classroom-like setting, rather than within the employer’s normal operations, and if the skills learned are applicable to many employers — not just the one providing the internship — it is more likely that the intern may be exempt from the FLSA’s wage and overtime requirements. This also makes it more likely that the internship benefits the intern, rather than the employer. Also, if the intern’s activities do not result in any profit to the business (or a related networking or client relations gain), if the intern is not displacing a regular employee, and if the intern’s activities are closely supervised by existing employees or if the intern essentially shadows an existing employee in his or her job, it is more likely that an unpaid internship is appropriate. Finally, it is important that an unpaid intern understand that he or she is not entitled to compensation and that he or she cannot expect employment at the conclusion of the internship. Such an arrangement is considered a trial or training period for the employer, and the intern will be considered an employee subject to the FLSA’s wage and hour requirements.
These considerations should not deter you from hiring students and graduates this spring. Interns, recent grads, and a generally educated workforce, can be a great asset to your business. However, it is important to consider whether your advertisements, hiring procedures and compensation strategies could expose your business to liability. Typically, small changes and training can go a long way toward protecting your company from the potential claims discussed above, and you should consult with counsel for advice specific to your business.
Ryan Colleen Daugherty is an associate and member of the litigation group at McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is located in the firm’s Lexington office and can be reached at rdaugherty@mmlk.com or at (859) 231-8780.