Page 39 - Network Magazine Summer 2019
P. 39

       are provided to a regular employee, such as vacation time, health insurance, or a pension plan. The worker should be free to work for other entities and should not spend the entirety of a workweek working for one com- pany. Further, the worker should have some potential liability with regard to the work being performed. For example, if the company is not paid for work performed by the end client, the worker also does not get paid.
The foregoing is not an exhaustive list of factors which would be considered, but merely examples of what a court, or the Department of Labor, would review when determining if a company misclassified an employee as an independent contractor. If such a determination is made, the company would be subjected to significant
penalties and potential damages including attorneys' fees and a twenty-five percent additional payment on the money due to a worker for unpaid wages.
Similarly, if a company misclassifies an employee as an unpaid intern, it could expose the company to similar damages and penalties. In order to determine if an intern can be "unpaid," a company should determine who is the primary beneficiary of the work being performed. If the company is the "primary beneficiary," then the internship must be paid. If, on the other hand, the student is the "primary beneficiary," then the internship may be unpaid.
In order to determine the “primary beneficiary”, a com- pany can look to certain factors which include the fol- lowing: the intern clearly understands that there is no expectation of compensation; the internship provides training that would be similar to that which would be given in an educational environment; the internship is tied to the intern's formal education program; the internship's duration is limited; the intern's work complements the work of paid employees; and the intern and the employer understand that the internship is conducted without en- titlement to a paid job at the conclusion of the internship.
Improper use of the fluctuating workweek, independent contractors, and unpaid interns are merely a few ways in which wage and hour issues can sink an employer. It is imperative that an employer remains aware of all the changes and updates to the laws and regulations and properly pays its employees. If an employer fails to do so, it will end up hitting an iceberg without a lifeboat.
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Hoffman Hlavac & Easterly represents private and public employers in all aspects of the employment relationship. The Firm’s clients include employers of all sizes in a broad industry range, including health care, banking, manufacturing, education, retail, hospitality, and car dealerships. HHE can help your company with all of its employment related needs and ensure that you are not the next target for an employee’s claims.
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