Tuesday, April 20, 2010, 08:55 PM - Political developmentsOpportunities have been in short supply for many young high school and college graduates, as companies freeze hiring.
That's led to an uptick in grads seeking internships, even unpaid internships, as a bridge toward a career or graduate school.
How does California law deal with unpaid internships? What labor laws apply?
California's Division of Labor Standards Enforcement has now outlined its position. The DLSE policy is set forth in an opinion letter dated April 7, 2010 addressed to Joseph. V. Ambash of the Greenberg Traurig law firm.
The program in question was designed for 18 to 24 year olds who have not finished high school or a G.E.D. and had a training component similar to what would be offered in a vocational school. The program's goal was to empower young urban adults with IT and career skills. The program had a community college segment as part of the internship as well as a placement segment where participants would be placed at businesses or non-profits.
The DLSE concluded that these interns were not employees for purposes of coverage under California's minimum wage laws. Citing the U.S. Supreme Court's 1947 decision in Walling Vs. Portland Terminal Co,, 330 U.S. 148, the DLSE looked at six criteria:
(1) The training, even though it includes actual operation of the employer's facilities, is similar to that which would be given in a vocational school;
(2) The training is for the benefit of the trainees or students;
(3) The trainees or students do not displace regular employees, but work under their close observation;
(4) The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer's operations may be actually impeded;
(5) The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
(6) The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training
The memo notes that the above criteria must be applied in view of "all the circumstances" of the intern's activities. Apparently the DLSE has in the past (now discontinued) used an 11-factor test which included these factors:
(7) Whether any clinical training was part of an educational curriculum
(8) Whether the trainees or students received some employee benefits
(9) Whether the training was designed to benefit the particular employer or rather to qualify the trainee to work in similar businesses
(10) Whether the screening process was different than would be used for employment
(11) Whether advertisements for the program were couched in terms of education and training
According to the DLSE, the internship program would not be exempt "where the intern's activities become an integral part of the business' activities and the business derives any consequential economic benefit from the intern's activities".
The memo notes that "Agreements or other statements by trainees that they will not be paid for their activities do not constitute a waiver of protections under the FLSA but are relevant only insofar as it shows the expectations of trainees for purposes of this factor".
Writing a 17 page analysis, DLSE Acting Chief Counsel David Balter concluded that this particular internship program (for Year Up Inc.) satisfied the 6 criteria and that the interns would be exempt from California's minimum wage law.
Balter notes, however, that "the facts of any new intern placement which vary from your letter must continue to be reviewed on a case by case basis".
Clearly, since this internship program was exempt from California wage and hour labor laws, there would be no "employment" for California workers' comp purposes.
But the memo (which has not been tested in court) leaves open the possibility that internship programs which meet some but not all of the six criteria would fall afoul of California labor laws. At what point would such interns be deemed employees for wage and hour law purposes?
And if the intern is not exempt for wage and hour purposes, will the intern be an employee for workers' comp purposes? Would it make a difference if the intern is given some perks...a small scholarship, parking and meal allowance, expenses reimbursement, personal gifts, or something else of value? When does the line get crossed to where the intern is an employee?
These are interesting questions. If such situations have arisen in California workers' comp law, I'm not aware of them.
But in a weak economy we're likely to see more issues of this type arising in the comp world.
Here is the link to the DLSE memo:
Sunday, April 18, 2010, 09:40 AM - Political developmentsNext time you hear some company threaten to move overseas because of high labor costs, just remember this.....
We shouldn't, can't and won't compete against this....:
http://www.dailymail.co.uk/news/article ... awake.html
It's an amazing picture of a Microsoft workforce working under pathetic working conditions.
Thursday, April 15, 2010, 10:49 PMThose of you from other parts of the state have likely never had the pleasure of driving from Oakland to San Jose at rush hour.
That's where I found myself this morning, headed to an appearance at the San Jose WCAB.
It always amazes me that traffic can be so clogged in one of the nation's most important incubators of technology and innovation. Many of the world's most visionary companies are located in the area, but commuter traffic is often a crawl.
But there's more time to gaze at overpasses. There today were a gaggle of tea-partiers, holding signs decrying too much government. But what would they cut? Medicare? Social Security? Mine safety? Wage and hour enforcement? Wish someone would survey them to get some concrete answers.
And there's more time to read billboards.
And lo and behold, there was a huge billboard, emblazoned with "No workers' comp? That's criminal".
Sponsored by the Santa Clara County District Attorney Dolores Carr, these ads are designed to educate that not carrying workers' comp is a crime. There are 21 of these billboards.
Good ad campaign.
In case you missed it, here is a reprise of my post, "It's the Employer Fraud, Stupid-Part 1"
http://www.workerscompzone.com/index.ph ... 670342ae49
And, "It's the Employer Fraud, Stupid, Part 2":
http://www.workerscompzone.com/index.ph ... 818-110358
Thursday, April 15, 2010, 06:27 AM - Understanding the CA WC systemThe WCIRB (California's Workers' Compensation Insurance Rating Bureau) has just released its report on workers' comp through 12/31/09.
These reports are always a treasure trove of information about how the industry is doing.
I'll be sharing some reflections in upcoming posts.
A couple of snapshots in the interim........
The average insurer rate for 2009 was $2.35 for every $100 of payroll. That compares with $2.37 in 2008 and $2.46 in the last half of 07. By comparison, in 2003 the rate was $6.45 for every $100 of payroll.
That's the kind of comparison that gets the CalChamber enthused.
Written premium declined to $8.9 billion ($6.3 billion when deductible credits are factored in). In 2006 the premiums were $16.4 billion (or $11.3 billion when factoring in deductible credits).
It's striking to see how premium has declined so much over the past few years, presumably reflecting the poor overall economy/financial meltdown and perhaps reflecting a continuing shift in the mix of California businesses.
More to come. Meanwhile, here is the WCIRB report:
Tuesday, April 13, 2010, 09:49 PM - Political developmentsCalifornia workers' comp lawyers see very few mining injuries. Mining is a small sector in the California economy, and below the surface mining is negligible.
Our hearts go out to the families of the injured and deceased miners in the recent West Virginia Upper Big Branch mine disaster, where some 29 miners were killed.
As the story unfolds, we learn of a company that repeatedly cut safety corners and a mine safety enforcement bureaucracy that was outmatched by the coal company, Massey Energy company.
Massey has been notable for its union-busting efforts.
In a report written for Truthout.com, Art Levine tells the story of Massey and the shrinking of the United Mine Workers. Levine notes a "safety gap" between the safety records at union mines and non-union mines:
http://www.truthout.org/missing-lesson- ... death58501
Also worth checking out is the film "Mine War on Blackberry Creek", a documentary which details some of the efforts by Massey CEO Don Blankenship to destroy unions in the mines. You can find a link to stream the video on the following website: