As construction firms continue to tussle with a growing labor gap, employers have to consider ways to overcome these challenges. Recruiting the best applicants, making the right hires, and retaining workers by offering competitive pay, benefits, and bonuses are some internal ways for construction firms to improve their employment success rate. But despite having a successful business and positive workplace culture, many construction firms consider the benefits of educating students and recent graduates from local colleges by providing them with an on-the-job learning experience. If this is the case, a construction firm may consider establishing an internship program.
In this editorial, an Orlando construction lawyer will discuss the employment laws related to internship programs. We will also provide you with some sound legal advice to ensure that your construction firm is in compliance with wage and hour laws governed by the U.S. Department of Labor Wage and Hour Division. Remember, the laws related to unpaid internship programs may vary by state, and requirements may be determined on a case-by-case basis. If your construction firm is considering establishing an internship program, consult the Orlando construction lawyers at Cotney Construction Law.
Understanding Federal Requirements for Interns
Before we delve into how to successfully implement an internship program, let’s first discuss federal requirements related to unpaid interns and students under the Fair Labor Standards Act (FLSA). In a recently updated law in 2018, the court system moved away from a rigid, six-step criteria and developed a seven-step “primary beneficiary test.” This test assesses the employer-intern relationship and essentially determines which party is truly the “primary beneficiary” of the partnership. This seven-step criteria includes:
- No Compensation: the first step is that both the employer and intern mutually agree that “there is no expectation of compensation.” In other words, an employer cannot suggest or imply that they will compensate the employee.
- Training Program: the intern should be provided with training in an educational environment. The experience should provide the intern with both clinical and hands-on training in their position.
- College Connection: the internship should be connected to the type of coursework the intern’s formal education program required or they should receive academic credit for their participation.
- Academic Commitments: the internship should not intervene with the intern’s academic commitments and should accommodate any of their requests to focus on their academic needs.
- Learning Process: the intern should have a “beneficial learning” experience throughout their internship. If they are no longer working in an environment conducive to learning, their internship should end.
- Valuable Addition: the intern should contribute to the workforce in a way that strictly complements their overall output; however, the work should not displace the work of full-time employees and should be under the supervision of these employees.
- No Guarantees: the employer and intern should have an understanding that the internship is unpaid. In other words, there should not be a promise that the internship will result in a paid job at the conclusion of the program.
Managing an Internship Program in Construction
The key element to the above “primary beneficiary” criteria is that the majority of benefits should favor the intern and not the employer. As long as the intern is benefiting from the arrangement, they can continue to learn in the internship without payment under the above seven-step criteria. However, as the seven-step criteria can be difficult to interpret, it’s best to consult an Orlando construction law attorney before launching your own program. Here are some more legal tips for running a successful internship program:
Know Federal Requirements: Regardless of where your firm operates in the country, at a minimum, employers should be aware of the laws governing them under the Fair Labor Standards Act. Although interns are not considered “for profit” workers, employers need to have a firm understanding of wage and hour laws, including minimum wage and overtime laws. Moreover, they should carefully consider the above seven-step criteria before bringing on any interns.
Know State Laws: Similarly, knowing the federal requirements is never enough. Employers should have a comprehensive understanding of state laws and be aware of the fact that “prevailing” wage laws can impact the local wage requirements. For example, although the federal minimum wage amount is $7.25, Florida’s minimum wage is $8.46. Another reason why an employer needs to have a firm understanding of the laws within their state is that these laws may offer an intern additional protection compared to federal laws. If your construction firm operates in several states, consult an attorney familiar with the laws in the state you are working in.
Provide Consistency: As many of the laws regarding interns in the workplace can be challenging to interpret, it’s critical that everyone from hiring managers to staffing agencies to department supervisors or even an internal marketing department understand the above guidelines. This will ensure that your business is in compliance with wage and hour laws related to internships. In order to establish and maintain a successful program, your company must provide consistent language related to the internship program.
Partnering With Schools: One of the safest and best outlets for utilizing internships is by partnering with formal education programs that can provide your business with the opportunity to offer mentorships to young, talented, and prospective construction professionals. Another option is to offer academic credit for participation in an internship. For this reason, many construction firms partner with construction management programs at distinguished universities for internship opportunities.
Offering Training Processes: To ensure that the intern remains the primary beneficiary of the internship, employers need to ensure that their workforce is providing a lot of interaction and learning opportunities for interns. From developing a successful onboarding process to consistent training courses and even providing certification for completion of safety and training courses, employers need to ensure that they are providing educational opportunities that rival any academic institution.
Updating the Handbook: If your business is developing an internship program, it’s important to update the policies in your employee handbook to reflect both the policies within your internship program and the new requirements set forth by the Department of Labor. In fact, every year you should review your handbook and assess any company policies that have changed and whether or not they are featured in your employee agreement. Remember, for any of your employee handbook drafting, review, or revision needs, consult our Orlando construction attorneys at Cotney Construction Law.
Having a Signed Agreement in Place: It’s best to have a signed agreement in place between the intern and the business acknowledging that the intern has a full understanding of their role with the company. The agreement should cover that the intern has agreed to a position without compensation, that they understand that they will be provided an education and training in lieu of payment, and that there is no agreement in place guaranteeing them full-time work at the end of their internship.
Consider Other Laws and Policies: Although interns may fall outside the wage and hour rights of full-time employees, employers need to be mindful of other laws relevant to interns. For example, an intern located on the jobsite presents a great deal of liability related to workers’ compensation coverage. Interns under the age of 18 present other issues. As minors, a 17-year-old intern is prohibited from working in hazardous conditions and is not allowed to work extensive hours at the workplace. Considering the above laws, interns should never be placed in situations in which they are near hazardous conditions or can experience an on-the-job injury.
Avoid Common Internship Pitfalls
To reduce liability, construction employers need to be mindful of the potential pitfalls of hiring unpaid interns. Employers should avoid these common mistakes when bringing interns into their workplace:
- Rigid Scheduling: Interns should not be imposed an inflexible schedule that requires them to work designated shift times. Moreover, if an intern needs to tend to school work or another important activity, they should have the option to pursue that opportunity without any form of penalty from their employer for missing time.
- Offering Compensation: An employer should never promise an intern any form of compensation for their work. Remember, if you offer an intern compensation for their hard work or for completing a task on time, they may no longer be considered an intern by federal law standards. In other words, once they are being compensated for their work, they should be offered the same wage and hour rights that employees enjoy including minimum wage and overtime pay.
- Promising Full-Time Work: An employer cannot promise, suggest, or imply that an intern will be transitioned over to a full-time position during their internship. Similar to the rules regarding compensation, there should never be any promise of additional benefits beyond providing the intern with an excellent education and learning experience during their internship.
- Not Offering Supervision: Interns need to be offered a role with a company that continues to improve their educational and professional development. In other words, interns should not be performing menial tasks to meet business needs. Further, they should have a supervisor present in the workplace that is training and educating them throughout their internship experience with the company. Lastly, their work should contribute to the workforce’s output and not replace a full-time worker’s tasks.
Partner With an Orlando Construction Attorney
When an internship program is successfully launched and compliant with federal, state, and local laws, it can be a wonderful exchange because the intern is granted the opportunity to obtain educational experience that can lead to a successful career. For construction firms, it gives employers the opportunity to recruit and engage with young, talented, prospective professionals that can potentially fill their labor needs in the near future and contribute to objectives for the time being.
However, the construction industry also offers a myriad of challenges to construction business owners both on and away from the jobsite. Employers must always be aware of the rules and restrictions related to employment laws, including internship laws, and ensure compliance with these laws. For this reason, many businesses that have workers eligible to be classified as interns elect to pay these employees for their work to avoid any type of litigation.
Because internship laws can be challenging to interpret and vary depending on your location, it’s best to consult our construction attorneys to reduce liability and ensure that you are in compliance with laws governed by the Department of Labor. To learn more about employment laws related to your construction business, consult the Orlando construction lawyers at Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.