Misclassification of Workers - Proskauer Rose LLP

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the employer that provides the training derives no
immediate advantage from the activities of the trainees and
on occasion the employer’s operations may actually be
impeded; (5) the trainees are not necessarily entitled to a
job at the completion of the training period; and (6) the
employer and the trainee understand that the trainees are
not entitled to wages for the time spent in training.
iv. Irrespective of how an individual is described – intern,
trainee, apprentice, extern or volunteer – the ultimate
inquiry, under federal law, is whether he or she is suffered
or permitted to work or falls within the six-factor test.
While most federal courts have followed the Walling
principles and the U.S. DOL’s six-factor test, there is
judicial precedent for looking at the totality of the
circumstances, rather than applying a rigid approach, and
examining which party benefits the most from the
relationship – the employer or the alleged “intern.” See
Reich v. Parker Fire Protection Dist., 992 F.2d 1023, 1027
(10th Cir 1993).
b. Volunteers
i. In Tony & Susan Alamo Foundation v. Secretary of Labor,
471 U.S. 290 (1985), the Supreme Court held that a nonprofit
religious foundation’s workers were “employees”
within the meaning of the FLSA, notwithstanding the fact
that not one witness was produced who viewed his work in
the Foundation’s commercial business as anything other
than volunteering services. The Alamo Foundation was
staffed mostly by “associates” – who did not receive any
cash salaries – but who were provided with food, clothing,
shelter, and other benefits for long periods of time,
sometimes years. Id. at 292. While the associates who
testified vehemently protested any desire for
“compensation” from the Foundation, and vigorously
asserted that they considered themselves volunteers who
were working only for religious and evangelical reasons,
the Supreme Court nevertheless concluded that the
“associates” were in fact “employees.” Id. at 302.
ii. The Supreme Court agreed with the district court’s
reasoning that, because the individuals were “entirely
dependent upon the Foundation for long periods,” they
must have expected “in-kind benefits…in exchange for
their services.” Id. at 301. That exchange was clearly not
within the purview of the FLSA’s permissible payments to
volunteers of reasonable benefits, expenses, or nominal
fees. 29 U.S.C. § 203(e)(4). Based on the economic reality
of the situation, the Supreme Court upheld the lower