DOL Doubles Back on Interns

By James Korte

On January 5, 2018, the US Department of Labor (“DOL”) endorsed the seven-factor “primary beneficiary test”, also known as the “Glatt Test,” to determine whether interns qualify as employees under the FLSA. See DOL Press Release. The DOL scrapped its 2010 six-factor test to better align its guidance with the test adopted by four Circuit Courts. Under the newly-endorsed primary beneficiary test, the DOL (and presumably courts) will look at a non-exhaustive list of seven factors which include, whether there’s a clear understanding that no expectation of compensation exists, whether interns receive training similar to what they would get in an educational environment, and to what extent the internship is tied to a formal education program. In stark contrast, the now-discarded 2010 test began with the presumption that an intern was an employee unless all six-factors were found to be in the employer’s favor. The 2018 primary beneficiary test provides the courts more flexibility to deal with the unique circumstances of each case. It also provides employers with more wiggle room for unpaid interns, but tread carefully.