May 2013 Newsletter
In this Issue:
- Paid & Unpaid Internship Programs
- Establishing a Summer Dress Code
- Small Businesses Slowly Hiring
- Work Opportunity Tax Credits
Paid & Unpaid Internship Programs
If you are a private, for-profit organization, your internship program may be subject to FLSA rules and guidelines concerning minimum wage and overtime. The FLSA defines the term "employ" very broadly to include "to suffer or permit to work." Covered and non-exempt individuals who are "suffered and permitted" to work must be compensated under the law for the services they perform for an employer – this can include interns.
Interns in the for-profit, private sector who qualify as employees typically must be paid at least the minimum wage and overtime compensation for hours worked over a normal 40 hour work week.
However, there are exceptions. If the internship is understood to be solely a training and educational opportunity for the individual, the FLSA regulation may no longer apply. Please note that for the program to qualify as a training/educational benefit, the employer must not gain any advantage from a business perspective.
To further clarify, the Department of Labor (DOL) has a six item list to help employers avoid potential FLSA violations.
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship;
- The employer and the intern understated that the intern is not entitled to wages for the time spent in the internship.
If these six criteria are met, the program is not subject to FLSA rules and regulations and the minimum wage and overtime provisions do not apply.
For public sector and non-profit organizations, unpaid internship programs are generally allowed. The DOL is reviewing the need for additional guidance on public sector and non-profit internship programs.
For more information and guidance, please refer to the DOL's Fact Sheet #71 or contact Michael Lanham, Client Services Manager.
Establishing a Summer Dress Code
Even though there is no legal requirement for an employer to institute a dress code, a well-written policy clearly sets an expectation, can help protect a company's image, promote a productive work environment, comply with health and safety standards, and even prevent claims of unlawful harassment.
As the weather gets warmer, the tendency is for dress codes to become more relaxed. A specific summer dress code will help avoid misunderstandings of what is appropriate and will also help supervisors enforce the dress code in a consistent, non-discriminatory manner.
When writing summer dress guidelines, here are a few questions to consider:
- What kind of working environment am I hoping to achieve, and how would relaxed standards impact our overall corporate culture?
- What has been the practice within our area and industry, and how will this impact public perception within the local business community?
- Have we relaxed standards on Fridays or on other occasions in the past? If so, have employees been willing to hold up their end of the bargain?
- What do you visualize when it comes to acceptable "business casual" attire? Do your employees share that view, or is the emphasis too often placed on "casual?"
- How big an issue is this among employees to begin with? Am I at risk of giving in simply to gratify a handful of employees at the expense of several others?
- When it comes to revealing and inappropriate attire, where am I prepared to draw the line, and what steps am I prepared to take to enforce it? Can I say with a straight-face that this standard applies equally to all employees in the same group? What about forms of self-expression such as tattoos and body piercings?
- What is the most effective way to communicate our standards to employees, new hires, and candidates alike? Company-wide meetings, mass emails, circulation of a written document, or all of the above?
- Are we prepared to live with any and all internal dress code guidelines, and have they been reviewed lately? If we are not prepared to enforce them to the letter, isn't it time to revisit them? If we are prepared, have we trained our supervisors to do so on a consistent basis, and are they willing to set the example? (Steven Bernstein, Fisher & Phillips)
As an employer, it is also important to be aware of practical, social, and religious accommodations you will need to make in your policy.
For more information or if you need assistance drafting a dress code policy, please contact Michael Lanham, Client Services Manager.
Small Businesses Slowly Hiring
According to the most recent Business Confidence Survey released by Insperity, Inc, small business owners are showing an increase in hiring employees. The survey was conducted April 9-11, 2013 and distributed to over 4,840 CEOs, CFOs, and other executives in a variety of industries.
Here are a few highlights:
- More than 40% of respondents stated they are adding employees and 55% are maintaining current staffing levels.
- 74% stated they are either meeting or exceeding their 2013 performance plans
- 59% expect sales to increase in 2013
- 59% expect to maintain current employee compensation levels while 23% plan to increase those levels
Click here for more information on the Business Confidence Survey.
Work Opportunity Tax Credits
The Work Opportunity Tax Credit (WOTC) is a tax incentive program that motivates employers to hire and retain employees. Employers can earn a tax credit equal to 25% (at least 120 hours worked) or 40% (at least 400 hours worked) of a new employee's first year wages.
There are many benefits to taking advantage of the WOTC. A few are highlighted below.
- WOTC can reduce an employer's federal income tax liability by as much as $9,600 per employee hired
- 50% of eligible new hires qualify for more than one tax credit category
- There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit
- Certain tax-exempt organizations can take advantage of WOTC by hiring eligible veterans and receive a tax credit against the employer's share of Social Security taxes
For more information on the WOTC, please visit the Department of Labor's Employment & Training Administration.
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