With summer rapidly approaching and COVID-19 shelter-in-place orders still in effect, many companies face an important and difficult decision of canceling this year’s summer programs, delaying start dates or conducting programs virtually. This ultimately will be a business decision with no one-size-fits-all answer.
A good first step is to assess whether the influx of new summer workers will help or hinder current operations. Are temporary summer interns a boost to productivity or a drag on experienced employees who may be called upon to train and mentor them? Will the employer expect to offer employment to these summer recruits following the internship?
In addition, given the seismic nature of COVID-19 that has indiscriminately shaken businesses in most industries, can an employer’s business afford to bring on temporary summer workers and, if so, does the business have the literal and figurative bandwidth to support these workers, especially if they will be teleworking for at least part of the summer?
Below are five compliance and management issues employers should consider for their upcoming summer programs.
Typically employers have a pre-employment screening process in place for summer interns/analysts/associates, which may include, among other things, screening for illegal drugs and controlled substances; investigating and verifying criminal history; and verifying education and prior employment history. Many steps in the screening process take place in person. However, even where new hires may be asked to commence employment remotely, including an incoming summer class, compliance is still possible.
Since the start of COVID-19 pandemic, the federal government has relaxed many of the regulatory requirements for onboarding new hires. On March 20, the U.S. Department of Homeland Security announced that for the next 60 days or for the duration of the National Emergency (whichever is sooner), employers with staff teleworking due to COVID-19 can obtain and inspect new employees’ identity and employment authorization documents remotely rather in the employee’s physical presence, as long as they provide written documentation of their remote onboarding and teleworking policy for each employee.
Physical inspection can be delayed until normal operations resume, at which time employers will have three business days for in-person verification of identity and employment eligibility documentation of employees onboarded virtually. Notably, the I-9 verification requirements do not apply to interns, trainees, etc. who receive no form of payment — i.e., money, meals, lodging and other benefits.
Because most employers are not required to submit their employees for drug tests, they can choose to forego drug testing screens for summer interns, or delay them until in-person work resumes. However, employers should not abandon standard employment and educational history verifications. Whether handled internally or outsourced to a third-party, these types of background checks can be done online once appropriate authorization forms are completed and e-signed.
The Occupational Safety and Health Act of 1970 (OSH Act) applies in some forms to telecommuting employees, including summer interns and analysts. Specifically, employers may be required to record injuries and illnesses suffered by remote workers that are "work-related," meaning that they occur while the employee is performing work for pay or compensation in the home and are directly related to the performance of work rather than to the general home environment or setting.
In addition, under the OSH Act, employers could be held liable for any devices or electronic platforms provided to employees to facilitate telecommuting. Separate but related, workers’ compensation could cover injuries incurred at an intern’s home office during the course and scope of employment.
Summer employees should be encouraged to contact HR with any concerns or needs about their home "office."
"Tele-summer programs," like teleworking generally, pose unique challenges for an employer in terms of monitoring interns’ hours and activity.
For example, it is good practice to direct summer employees to use software that allows them to accurately record and submit their hours remotely through a smart phone app or online and require them to agree in writing that they will use the firm-recommended software to document their hours. In addition, employers should adopt a written policy requiring summer employees to record all of their hours contemporaneously (rather than at the end of each work week). These measures may help employers mitigate the risk of off-the-clock and overtime claims when it is difficult to effectively monitor teleworking employees’ work hours.
"Intern" is often considered taboo nomenclature, as far as wage and hour regulators and legal practitioners are concerned. Before onboarding unpaid interns, it is critical to determine whether the employer’s internship program is subject to the wage and hour requirements of the Fair Labor Standards Act (FLSA) as well as any state-specific wage and hour laws in the jurisdictions within which the interns are working. Failure to follow the applicable laws and regulations could result in a finding that the interns are actually employees of the business — in which case the employer would be required to pay back wages for all hours worked, including overtime, as well as liquidated damages and shifting attorney’s fees if a lawsuit is brought.
The U.S. Department of Labor (DOL) and courts apply a "primary beneficiary test" to determine whether an unpaid intern is, in fact, an employee under the FLSA. This Test contemplates seven factors, which DOL set forth in Fact Sheet #71: Internship Programs Under the FLSA.
Although all of the factors are relevant, one becomes particularly important in the context of the current COVID-19 crisis: the extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
Recently, many employers have made the difficult decision to furlough or lay off employees; thus, many of these individuals may resort to applying for unpaid internships to gain experience and make inroads back into a workforce. Employers should ensure that interns participating in their program do not perform the same type of work that regular employees were performing before the furlough or layoff, as doing so could expose an employer to DOL or a court finding that the employer hired unpaid interns to replace its paid employees.
When considering unpaid internships, employers should consider implementing the following practices:
- Distinguish unpaid interns from employees. Create written policies applicable exclusively to the unpaid interns, separate from the policies applicable to employees. Review handbooks and remove terminology from written policies that blurs the line between interns and employees.
- Obtain unpaid intern acknowledgment. Require a signed written statement from the prospective unpaid intern noting that the intern has no expectation of wages, and the employer makes no guarantee of a job at the end of the internship.
- Document expense reimbursements, if any, to specific expenses with receipts to show that the unpaid intern incurred actual expenses that the employer, in fact, reimbursed. Without such records, DOL may conclude the "expense reimbursements" were disguised wages or stipends.
Management and mentoring
Because summer employees already need substantial direction and oversight in physical working arrangements, contact in WFH scenarios is especially important. Employees responsible for managing employees should establish at least bi-weekly touch points with summer workers, whether by phone or by video conference — ideally once at the beginning of the week to assign new work and once at the end of the week to discuss previously submitted work, ongoing projects and questions.
For companies that have their summer workers rotate through particular business functions or departments, relevant department heads should lead video or conference calls with each group to provide feedback and training, and to make sure that they have the support needed to work effectively remotely.
Summer workers should also have access to each other. Businesses may want to consider setting up a summer employee email distribution list and provide some sort of chat access.
Businesses can leverage tech such as Zoom to hold non-work related events where summer employees can have the opportunity to get to know their future co-workers on a personal level. A happy hour cooking challenge may be a good start, and be sure to make a toast to get getting back to the office as soon as possible.
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