As many employers have begun thinking about their summer hiring needs, the Department of Labor (“DOL”) has announced that going forward, it will apply the “primary beneficiary” test to determine whether interns working for “for-profit” employers are employees under the Fair Labor Standards Act (“FLSA”). The DOL’s announcement provides much-needed clarity to employers, as it comes in the wake of a growing number of federal appellate court decisions that have rejected the DOL’s former six-factor test to determine internship status. Indeed, with this announcement, the DOL has conformed with rulings from the U.S. Courts of Appeals for the Second, Sixth, Ninth and Eleventh Circuits, each of which have rejected the agency’s former six-factor test.[1]

Under the “primary beneficiary” test, employers must examine the “economic reality” of the intern-employer relationship to determine which party is the “primary beneficiary” of the relationship. This test is a flexible test, and whether an intern is an employee under the FLSA will depend on the unique circumstances of each case. The DOL has outlined seven circumstances which can be considered as part of the “primary beneficiary” test. These circumstances are outlined here.

If analysis of the circumstances reveals that an intern is actually an employee, then he or she is entitled to both minimum wage and overtime pay under the FLSA.

[1] E.g., Benjamin v. B & H Educ., Inc., — F.3d —, 2017 WL 6460087, at *4-5 (9th Cir. Dec. 19, 2017); Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528, 536-37 (2d Cir. 2016); Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199, 1211-12 (11th Cir. 2015); see also Walling v. Portland Terminal Co., 330 U.S. 148, 152-53 (1947); Solis v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518, 529 (6th Cir. 2011).