Am I Qualified for Compensation as a Trainee?

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Many recent graduates are happy to participate in training programs without pay. Their goal is to ultimately be recognized by the employer as having the potential to be a part of their paid workforce once their training period is over. 

Under the Fair Labor Standards Act (FLSA), if the participants in the employer’s pre-hire training program are considered “trainees,” they will not have to compensate them for the duration of the training program. As long as the trainee does not expect to be paid, the FLSA does not apply to the arrangement.

However, if the employer has made an offer of employment to the trainee before the training, then the program is technically an “orientation,” and pre-employment is compensable under the FLSA. According to the FLSA, trainees are not employees, and therefore need not be compensated by the employer as long as the following criteria of the flexible seven-factor DOL “primary beneficiary” test are met [1]:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa. 
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions. 
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit. 
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. 
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. 
  6. 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. 
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. 

The New York State Department of Labor (NYSDOL) has also followed a longstanding test to determine whether a trainee qualifies as an employee. The test incorporates the DOL test and includes five additional requirements [2]: 

  1. Any clinical training is performed under the supervision and direction of people who are knowledgeable and experienced in the activity
  2. The trainees or students do not receive employee benefits.
  3. The training is general and qualifies trainees or students to work in any similar business. It is not designed specifically for a job with the employer that offers the program.
  4. The screening process for the internship program is not the same as for employment and does not appear to be for that purpose. The screening only uses criteria relevant for admission to an independent educational program.
  5. Advertisements, postings, or solicitations for the program clearly discuss education or training, rather than employment, although employers may indicate that qualified graduates may be considered for employment.

Ultimately, you don’t qualify for compensation as a trainee if you are participating in a training program that meets all the requirements of the DOL “primary beneficiary” test. 

However, if you feel that you’re participating in a training program that has not met the requirements as outlined by DOL, contact Cilenti & Cooper, PLLC. We provide strong, knowledgeable guidance and legal representation to workers in the New York Metropolitan area who are not being paid their legal wages or overtime compensation. If you have questions about whether your wages are being paid appropriately, contact us or call (718) 841-7474.

Sources: 

[1] https://www.dol.gov/whd/regs/compliance/whdfs71.pdf[2] https://www.labor.ny.gov/formsdocs/factsheets/pdfs/p725.pdf

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