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The New Seven Factor Test For Unpaid Interns (Part 2)

In this second part of a two-part blog, Total HR Management will examine in depth the new seven factor test for unpaid interns that has been embraced by both the courts and the United States Department of Labor (DOL). Replacing the six factor test that made it almost impossible for companies to use students and young people as unpaid interns, the new criteria are more flexible and holistic. Rather than making absolute judgments across the board, they assess each case individually, allowing specific circumstances to define any final decision.

The key to the new seven factor test is expanding the idea of what it means to be a “primary beneficiary” of an unpaid internship. In the past, such a relationship was defined largely from the perspective of whether or not the company was receiving any benefit that resembled paid employment from the work being done by the unpaid intern.

Rather than employ an all-or-nothing approach in terms of such benefits, the DOL believes that the unique circumstances of each case need to be examined. As a result, the new seven factor test has been developed.

Detailing The Seven Factor Test

Below is a detailed look at the following seven factors that are now being used by the United States Department of Labor to determine whether or not an individual is an unpaid intern:

  1. Do both the intern and the employer clearly understand that there is no expectation of compensation? There cannot be a promise of compensation that is even implied. Such a promise suggests that the intern is an employee being employed by the employer.
  2. Does the internship provide training that is similar to that which would be given in an educational environment? Does such training include the technical aspects of the profession and other hands-on training provided by educational institutions?
  3. To what extent is the internship is tied to the intern’s formal education program? Does the internship include integrated coursework or the receipt of academic credit by the intern at their school?
  4. To what extent does the employer accommodate the intern’s academic commitments? Does the job correspond to the academic calendar? If so, is the intern able to meet such required educational commitments while doing the internship?
  5. Is the internship’s duration limited to the period in which the internship provides the intern with beneficial learning? Is the focus of the time spent during the internship educational for the intern or busy work for the employer?
  6. To what extent does the intern’s work complement the work of paid employees as opposed to displacing the work of actual employees? While complementing paid employees, does the intern’s unpaid work also provide significant educational benefits to the intern?
  7. Do both the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship? Is it clear that the internship is educational in nature and not a training period that is leading to future compensation?

A Bigger Picture As Opposed To Determinative Factors

seven factor test

Students and the Seven Factor Test

The goal of the seven factor test is to provide a bigger picture of the unpaid internship that clearly shows that it is educational in nature. When it comes to the above questions, there is no single factor that is determinative. The DOL sees this new perspective as both a positive push in the right direction and a warning as well. It cautions that whether an individual is properly classified as an unpaid intern will depend solely on the unique facts of any particular case. As a result, such facts will be closely examined.

Given this close examination, Total HR Management wants to make sure that our client companies are crossing the t’s and dotting the i’s. In other words, although unpaid internships are now a possibility, both caution and precision in regards to the process are recommended. Before allowing a student to intern at your company, you need to examine the “economic reality” of your true relationship with potential interns, review the new DOL Fact Sheet on unpaid interns, and examine the impact of such a step in regards to both federal and state wage and hour laws.

Total HR Management Can Help

In this process of making sure that everything is in order, Total HR can help. As a professional employer organization, Total HR Management will advise our client companies on what actions to take on both the Federal and the state level of regulatory compliance. To learn more about how Total HR Management can support your company and answer your questions, please contact us today. Take the first smart step and call (800) 975-5128 today to access the support you need to move forward.

 

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.

 

Department Of Labor Opens The Door For Unpaid Internships (Part 1)

For years, Total HR Management has warned our client companies to avoid unpaid internships for students and young people. The United States Department of Labor (DOL) had made such internships very hard to justify due to its six factor test that determined coverage under the Fair Labor Standards Act (FLSA). On January 5, 2018, the DOL abandoned its six factor test for assessing whether a worker is an intern or an employee.

Citing four separate appellate court rulings that had rejected DOL’s six factor test, the DOL announced that it would use a new “primary beneficiary” test to determine the “economic reality” of whether an individual is an intern or an employee. In other words, the DOL saw the tide changing on the appellate level and decided to shift as well. Such a shift makes sense because unpaid internships historically have been a key part of many young people’s education.

Abandoning Six Factor Test for Unpaid Internships

unpaid internships

Unpaid Internships and the Modern Student

Over the years, the six factor test has been viewed as difficult to apply and extremely broad, particularly the factor that the employer gains “no immediate advantage from the activities of the intern.” Indeed, such a clause made unpaid internships virtually impossible to justify by any company. How could an intern work to any degree in a company without providing that company some kind of positive advantage? After all, doesn’t the definition of work itself in any form imply an advantage by the very virtue of that work?

Given the need for unpaid internships so young people can develop skills and learn first-hand in high-level workplace environments, the DOL has moved beyond the six factor test. Instead, the new seven factor test, as framed by the Second, Sixth, Ninth, and Eleventh Circuits, is seen to be a more flexible and holistic approach towards the very idea of an internship. Developed by several federal appellate courts, the seven factor test allows judges to examine the “economic reality” of the intern-employer relationship to determine the “primary beneficiary” of the internship. In the second part of this two-part blog, the new seven factor test will be examined in detail.

Wage And Hour Division Updates Internship Test

Given the change of Federal policy, the DOL’s Wage and Hour Division is in the process of updating its enforcement policies to replace the six factor test with the new seven factor test. After all, if a company embraces the new policies, they should not be punished for taking a progressive stand that had been rubber-stamped by the DOL. Since government bureaucracies tend to change slowly when new policies are instituted, the goal of the DOL communicating with the courts is to make sure that no company is caught in the middle. Proactive change to adapt to new policies is a process that should be rewarded and congratulated.

From this perspective on the new federal employment policy, the DOL has revised the intern-versus-employee test to make it easier for employers to use and implement. However, Total HR Management wants to highlight that such changes only apply to the Federal level of regulations. Thus, employers need to be aware of state laws, particularly the question of whether their states employ a stricter version of this test. For example, eleven separate factors relevant to determining whether an unpaid intern should be considered an employee under New York law are defined by the New York Department of Labor.

Total HR Management Can Help

As a professional employer organization, Total HR Management will advise our client companies on what actions to take on both the Federal and the state level when it comes to such regulatory compliance. To learn more about how Total HR Management can help answer questions about unpaid internships and your company, please contact us today. Take the first smart step and call (800) 975-5128 today to access the support you need to move forward.

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.

 

IT Challenges Executives Will Face In Coming Years

IT challenges need to be at the top of the list of questions for companies to address in the coming years. According to the 2017 Gartner Symposium of CIO and Senior IT Executives worldwide, the information technology challenges coming in the next several years will take your breath away. Ranging from profound website modifications to AI-driven fake content, the IT challenges will demand precision and effort if your company is going to avoid being potentially hurt by such rapid-fire changes. However, if you know what is coming in advance and you take the proper steps, then a danger quickly can become an opportunity.

Total HR Access Expertise for IT Challenges

it challenges

IT Challenges in 2018 and Beyond

Although HR managers can help with such IT challenges by pointing your company in the right direction, Total HR Management does not pretend to possess an expertise that is not a part of our traditional HR services wheelhouse. As a professional employer organization (PEO), we focus on doing what we do best. Instead of taking on the IT advances on our own, by working with the very best technology consultants and gaining insight into future advances in that arena, we help our client companies address such issues. We provide access to both valuable experience and proven expertise by working with top consultants. After all, when it comes to technology, everyone can have an opinion, but only a true expert can offer an ongoing solution.

The IT challenges that will need to be faced by executives in the next five years include the following as presented below. By focusing on the top three IT challenges, Total HR offers our client companies a taste of what is to come. As you will see, a fascinating aspect of these changes is how they already have begun to affect our society as a whole on the levels of media, culture, and entertainment. In a sense, all three areas are quickly merging.

Three IT Challenges In The Next Five Years

1) Mobile Optimization For Voice Searches

Although mobile website modification has been the focus of recent years, Gartner has found that websites now need to be ready for voice-based search queries. Voice-based search queries are the fastest growing mobile search type. Voice search will continue to accelerate its pace of adoption, and your website needs to be ready. Both mobile browser- and mobile app-based transactions will continue to grow in 2018, but voice search will transcend all other traditional mobile searches. Indeed, voice searches are expected to become normative.

Over the next two years, Apple, Facebook, Google and Microsoft will continue to expand the capabilities of voice-search technologies. By 2021, your business will need to have redesigned your website to support voice-search. If you manage to accomplish this goal, it is estimated you will be able to increase digital commerce revenue by 30%.

2) AI Generating False Information and Fake News

Gartner warns that while AI is proving to be able to generate useful new information, it is just as effective at distorting data to create false information as well. The problem with detecting such fake news is that AI and machine learning systems today can categorize the content of images faster and more consistently accurate than humans. Fake news and counterfeit reality will become a problem for companies in 2018 and beyond. In 2018, there will be a 10-fold increase in commercial projects to detect fake news and false data according to the Gartner predictions study.

By 2020, AI-driven creation of “counterfeit reality,” or fake content, will outpace AI’s ability to detect it. By 2022, most people in mature economies will consume more false information than true information. Given such changes, your company needs to be ready to address any fake news affecting your industry as a whole or your company in specific.

3) Artificial Intelligence Affecting the Job Market

Everyone is worried about the rise in artificial intelligence stealing jobs and putting people out of work. Although AI will remove the necessity for certain jobs, it will create other jobs at the same pace. In 2020, AI will become a positive net job motivator, creating 2.3 million jobs while eliminating only 1.8 million jobs. By 2021 Gartner predicts, AI augmentation will generate $2.9 trillion in business value and recover 6.2 billion hours of worker productivity.

Yes, those numbers are overwhelming, and they will affect your business. What’s important is to understand how artificial intelligence will affect the macrocosm of your industry as well as the microcosm of your business. After all, if your competitors are using AI to get ahead, you need to take advantage of this opportunity as well. Ask yourself a simple, yet direct question: How is AI going to affect my business model and what can I do to make sure that the net result of such updates and technological transformations are positive for my company?

Total HR Management Can Help

Remember that the Chinese character for crisis also means opportunity. Often what appears like a crisis, in the beginning, turns out to be an opportunity in the end. The difference between your company being in danger and you company becoming more successful are the actions taken to address these changes. The IT challenges are coming whether you like it or not. Total HR wants to help your company address those challenges in advance before they become a problem in the future.

To learn more about what we can do to help you with the coming IT challenges, please contact Total HR Management by calling (800) 975-5128 today. Our HR managers are here to help your company succeed.

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions.  Such materials are for informational purposes only and may not reflect the most current legal developments.  These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.

 

Top HR Trends for 2018 (Part 3)

The top HR trends in any given year are important to follow. In 2018, the top HR trends will have a resonant effect on companies across the nation. As technology advances and management options expand, you need to keep your company one-step ahead of the curve. In response to this need, Total HR Management offers this comprehensive list of the latest HR trends that are going to play a role in the coming. Our awareness of these top HR trends helps us to provide better service for our clients, staying a step ahead of the competition. As always, our goal as a professional employer organization (PEO) is to provide our client companies with HR services that are both useful and affordable.

top hr trends

Top HR Trends of 2018 in your Hand

Part 3 of this three-part article closes out the list of top HR trends by focusing on supporting and optimizing the employee experience at your company. Beyond recruiting and selecting the best talent in your industry, the following top HR trends will help you make your employees more valuable by improving their understanding of your business and improving their skill sets. By examining each of the top HR trends, we want to help our client companies develop an awareness of what could be coming down the line. After all, each of these changes can help a company continue to succeed moving forward.

Twelve 2018 HR Trends (9-12)

9) Shaping And Optimizing The Employee Experience

Technological advances in human resources management have provided the ability to track employees. Thus, HR managers can now figure out which internal strategies are working and which are not. Human resources in a company are about building an internal brand for your business that attracts and keeps the best employees. Rather than having to choose between the building of employee relationships and getting all the paperwork done, AI technologies can allow for both. Faster technological applications now allow for a more streamlined employee experience that can be shaped and optimized. Human Resources providers build internally conducive atmospheres for employees by bringing people and processes together.

10) Continuous Feedback Loop = Employee Growth

Annual reviews are quickly becoming a relic of the past. 43% of highly engaged employees receive feedback at least twice a week. Ongoing corrective feedback has proven to be more constructive than any form of feedback. Without direction, employees often get lost in minutiae. By allowing managers to use new technologies to keep track of employee productivity and processes, companies can increase the bottom line.  Regular and constructive feedback based on performance has been shown in research studies to be effective. HR providers can use analytical tools to help achieve optimum performance from every employee in an organization. Research also has also shown that employees prefer on-the-spot feedback, as long as it is constructive, over formal yearly reviews. In 2018, this trend that highlights ongoing feedback will continue to be adopted by companies in many industries.

11) Taking Advantage of Online Education and Learning Software

Like ongoing feedback, ongoing learning is a key HR trend in the ongoing optimization of the employee experience. Online educational resources and digital training through learning management software (LMS) give HR the ability to measure employee productivity by garnishing concrete data. LMS software widely used across multiple industries include SkyPrep and SkillPort. For example, SkillPort offers a full learning experience as a stand-alone learning platform, but it also can be easily integrated into existing business and IT systems. Such flexibility takes online education to the next level by merging what your business needs with the latest educational and training delivery tools.

12) Greater Focus on Technology Skills Development

Closely related to the previous trend, there will continue to be a greater focus in 2018 on technology skills development. Professional development technologies can be employed through company intranets, fostering transparent forums that connect employees and foster educational collaboration. In other words, you don’t have to leave your cubicle to receive training from someone on another floor. Instead, such training can be done online effectively without draining resources or wasting time. HR can use these tools to help every employee raise their level and maintain a comfort zone with the company’s latest technological platform.

2018 HR Trends = The Future Success of Your Company

By knowing 2018 HR trends, particularly about technology and how it can optimize the employee experience, you can help to ensure future success. Total HR Management is happy to support you in that process. Take the first step to keep up with the competition by calling (800) 975-5128. Allow us to help you succeed in a manner you envision.

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions.  Such materials are for informational purposes only and may not reflect the most current legal developments.  These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney

 

Does Your Company Have An Office Policy On Workplace Wearables?

Prior to the 21st century, workplace wearables really were not a human resources issue for most companies. Beyond the Casio calculator watch from back in the day, workplace wearables were not a reality before the release of the first version of the iPod on October 23, 2001. Even then, workplace wearables really did not become a question to be addressed by HR professionals until the rise of the Internet and the introduction of the Apple Watch in 2015.

workplace wearables

Do You Need A Workplace Wearables Office Policy?

Today, from health monitors and location trackers to wireless earbuds and smart glasses, workplace wearables pose a sudden multitude of benefits and risks to employers. Without a doubt, the demand for workplace wearables is exploding. Over the next 10 years, the market is expected to quintuple from $14 billion to $70 billion. In many industries, employers are just as excited as consumers and employees. The challenge is that new technologies often cause disruptions and unforeseen negative consequences when carelessly integrated into the workplace.

There is no question that employers must be mindful of legal pitfalls looming in the future. It’s essential is to make sure that a workplace wearables office policy opens the door to the benefits while avoiding any increased exposure to employer liability. In addition, any such policy will need to be revisited as the technology changes. After all, today as the 21st century is deep in its second decade, we merely are at the dawn of the workplace wearables revolution.

The Benefits of Workplace Wearables

As a professional employer organization, Total HR Management believes that an office policy on workplace wearables is becoming more and more of a necessity in 2017. Although the benefits of workplace wearables are many, the distracting influences and even external threats must be considered as well. Workplace wearables need to be divided into categories, particularly in relation to Internet access and privacy considerations. Although the benefits are significant, the potential negatives must not be allowed to disrupt an office.

The benefits of workplace wearables include enhanced worker communications and increased workplace safety. Moreover, wearables can be part of employee training and can improve employee tracking. Workplace wearables can allow employees to record themselves performing a task. Beyond providing a record, such a recording offers the potential for instantaneous feedback through sharing.

In other words, workplace wearables offer 24-7 access to your employees while they are on the job. They remove many of the traditional excuses for being out of touch or non-contactable. Moreover, according to experts from the University of London, wearable technologies have been also found to boost employee productivity by 8.5 percent, and to increase job satisfaction by 3.5 percent.

The Risks of Workplace Wearables

With access to the Internet available all the time, workplace wearables pose an obvious risk to confidential information and intellectual property. The impulsive nature of being in the moment with a workplace wearable could cause an employee to reveals inappropriate information. Rather than having the traditional filters and boundaries, workplace wearables make communication through email and social media a little too accessible. In light of the potential disclosure of your company’s confidential information, the issue of workplace wearables in the office must be handled with firm precision and a delicate balance.

Fitness-oriented workplace wearables can help improve the morale and the health of your employees. However, employee fitness programs connected to workplace wearables open the door to a host of potential issues. All such programs must be vetted to make sure they do not violate federal programs like the Health Insurance Portability and Accountability Act (HIPAA) and the Americans with Disabilities Act (ADA).

Although you can encourage employees to be healthy and keep fit, such programs need to be largely self-administered. You might want to give your employees Fitbits, but you are not allowed to track their progress. You need to be very careful not to open the door to potential penalties and federal violations. From HIPAA requirements and ADA prohibitions to EEOC (Equal Employment Opportunity Commission) issues and GINA (Genetic Information Nondiscrimination Act) question marks, the federal hurdles for an employee wellness program combined with workplace wearables are many.

Is Smaller Always Better?

The potential business uses for smartwatches, smartglasses and other intelligent wearable devices are numerous. As wearable devices become smaller and more discrete, concerns about data security, surveillance and safety grow as well. Many of these devices offer hidden sound and video recording possibilities. Literally, the devices used by Cold War spies seem almost antiquated in comparison to what any consumer’s smart phone now offers. Beyond smartphones, miniature recorders and cameras are now common as well.

If an employer has access to the tracking capabilities and data collection of workplace wearables, written policies that explain in detail what types of data may and may not be collected need to be established. It must also be clear how the data will be used, and how it will be stored or destroyed. Workplace wearables should not be a step into either the spy world of James Bond or the tyrannical oppression of George Orwell’s 1984.

Even more importantly, employers need to make sure that employees do not use workplace wearables to violate wiretapping and surveillance laws. They also need to make sure that they avoid doing the same. For example, in California, all parties to a conversation must consent to its recording. Without a doubt, such dangers must be avoided. Any new workplace wearables introduced by a company need to benefit both the employees and the employer.

Total HR Management Can Help

The challenges that come with introducing wearable devices into the workplace have been faced in the past. With the pace of technology adoption only increasing and new challenges on the horizon, you need to stay ahead of the game. Total HR Management can help, including a revision of your employee handbook to include a workplace wearables office policy..

To learn more about how we can help your company establish a policy in regards to workplace wearables, contact Total HR Management today. Please call (800) 975-5128 today to speak with an HR professional and access the help your small to mid-sized company needs.

 

No Legal Advice Intended: This blog includes information about legal issues and legal questions.  Such materials are for informational purposes only and may not reflect the most current legal developments.  These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.

 

 

 


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