California Employee Rights Advocate : California Labor Attorney & Lawyer : Southern CA Employment Law : Los Angeles, Orange County : United Employees Law Group

With our current economic state, companies, employees and new graduates are equally concerned with employment. College students or new graduates are facing the age old issue of having a degree without experience while companies are looking to save money on payroll and keep a knowledgeable staff. Often time companies will offer unpaid internships a seemingly mutually beneficial relationship. College students are able to add experience to their resumes while companies get free labor.

But at a closer look, this might not be a fair shake. What if the student is studying to be in marketing and the company places he/she in the accounting department to do data entry all summer?

Federal Department of Labor (DOL) has set forth a few ground rules on who should be considered and intern versus who will be an employee.

1. The training is similar to that which would be given in a vocational school.
2. The training is for the benefit of the trainee.
3. The trainee does not displace a regular employee and works under close observation.
4. The training provider derives no immediate benefit from the trainee; in fact, its operations may be impeded.
5. The trainee is not entitled to a job at the completion of the training.
6. The employer and the trainee understand that the trainee is not entitled to wages; however, a stipend may be permitted. (Employment Relationship/ Trainees, U.S. Dep't of Labor Op. Ltr. Wage and Hour Adm. WH-229.)

California Department of Industrial Relations took it a step further and added a few criteria of its own:

7. The training should be part of an educational curriculum.
8. The students should not be treated as employees for such purposes as receiving benefits.
9. The training should be general in nature, so as to qualify the students for work for any employer, rather than designed specifically as preparation for work at the employer offering the program.
10. The screening process for the program should not be the same as for employment.
11. Advertisements for the program should be couched in terms of education rather than employment. (See generally Cal. Div. of Labor Standards Enforcement, Opn. Ltrs. 1998.11.12 and 1996.121.30, available at www.dir.ca.gov/dlse/ DLSE_OpinionLetters.htm.)

It’s important to be able to distinguish who will be considered an intern and who should be considered an employee not only for payment purposes but also for workers compensation insurance and for benefits entitled to employees such as medical insurance and paid time off.
Labor law is complex if you have any questions regarding your employment it is recommended that you contact a California labor law attorney who can help you understand your rights and in many cases will review your situation without charge.

If you have any questions about this article or our blog, feel free to call us at:

Long Beach – (562) 256-1047
Los Angeles – (213) 261-0229
San Francisco – (415) 200-0012 or (415) 230-2755
San Diego – (619) 342-1242 or (619) 272-2193

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If an employee is pursuing a small to medium company for overtime wages and insolvency or ability to pay a claim is in question, it is imperative to determine if there is individual liability. In addition, even if the employer is large, the exposure to individual liability with a manager or officer, may also pressure the employer into a settlement.

The relevant California Labor Code provisions which establish individual liability are §§18, 558, 1197.1 and 1199. These sections provide as follows:

• California Labor Code §18:  "’Person’ means any person, association, organization, partnership, business trust, limited liability company or corporation."
• California Labor Code §558: (a)  “Any employer or other person acting on behalf of an employer who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the Industrial Welfare Commission shall be subject to a civil penalty as follows: (1) For any initial violation, fifty dollars ($50) for each
  underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages.(2) For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages. (3) Wages recovered pursuant to this section shall be paid to the affected employee.
• California Labor Code §1199, 1197.1 :  "Every employer or other person acting either individually or as an officer, agent, or employee of another person is guilty of a misdemeanor and is punishable by a fine of not less that one hundred dollars ($100) or by imprisonment for not less than 30 days, or both, who does any of the following: (a) requires or causes to be paid to any employee a wage less than the minimum fixed by an order of the commission; (b) Pays or causes to be paid to any employee a wage less that the minimum fixed by an order of the commission or (c) Violates or refuses, or neglects to comply with any provision of this chapter of any order or ruling of the commission.”

In addition to the above California Labor Code sections, provisions of the California Industrial Welfare Commission, (IWC) orders,  have a bearing on individual liability. IWC Orders 4-2001 § 2(H) provide the following definition:

"Employer" means any person as defined in Section 18 of the California Labor Code, who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person."

If an employee is seeking overtime wages, it is wise to have as many “arrows in the quiver” i.e. name as many relevant defendants as possible, to perhaps get a higher and sometimes faster settlement.
 

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