Employers cautioned about interns, contract help

After months of layoffs, some employers see the light at the end of the recession tunnel and are getting ready to place help-wanted signs in their windows.

United States companies are expected to hire more people than they lay off in the next six months, according to a National Association for Business Economics survey released last week. Before the hiring begins, though, some rules should be kept in mind, according to Michelle Jacobsen, an employment law services representative of the Mountain States Employers Council, who spoke to Colorado employers during a conference last week at Two Rivers Convention Center.

Not every employer knows the rules, and some have been tangled in a legal mess this year. During the first nine months of the year, the U.S. Equal Employment Opportunity Commission filed 87 lawsuits against employers on behalf of employees that felt they were treated or paid unfairly. The lawsuit count was two during the first nine months of 2008.

“That increases the need for employers to take (federal laws on employment) seriously,” Jacobsen said.

First, a company needs to know how to classify a position. The temptation may be to save money by hiring an unpaid intern or classify someone as an independent contractor, Jacobsen said. But an intern usually has to earn college credit and possibly have a classroom-like learning experience in order to go without at least minimum wage. Interns must receive training that benefits them. They cannot replace an existing employee’s duties or be guaranteed a job at the end of their internship.

The Internal Revenue Service uses 11 questions to determine who’s an independent contractor. Some state agencies use different tests. Tests include determining how much control the “independent contractor” has over his or her finances and behavior and the relationship between the worker and employer. If an employee is incorrectly classified, an employer may face a fine.

Existing employees have to be paid overtime if they’re working two non-exempt jobs at the same company and the hours from the two jobs surpass 40. Exempt employees can jeopardize their salaried status if they work more hours at the same company in a second, non-exempt job. Employees cannot volunteer extra work without pay because they don’t count as volunteers under the Fair Labor Act.

If employers want to implement furlough days, Jacobsen said, they also need to recognize exempt employees have to take a full furlough week if an employer doesn’t want them to take pay. With a salary, the employer would still pay for a whole week of work even if the person was asked to take a day off.


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