Information on Fair Labor Standards Act
Posting on APPIC Members Listserve October 13, 2004
Additional Information from APA -
November 4, 2004 - Download Word Document
Dear APPIC Members
We would like to provide you with an update regarding our efforts to understand the impact of the new Fair Labor Standards Act (FLSA) legislation on internship programs. As you all know, many of our members have expressed concern about this legislation, and we last provided information in mid-September.
To recap, the FSLA legislation has increased the minimum salary for employees who are not eligible for overtime pay to $23,660. Questions have been raised as to whether this legislation applies to psychology internships. APPIC members have received different opinions from different regional offices of the Department of Labor as to whether interns are exempt from this requirement. Different institutional Human Resources offices have also made different decisions, in part related to the status of internship positions at a given site.
For many of us, our HR departments have felt that this applied to our interns and this is higher than our current stipends. As a result we have needed to make adjustments in our programs for this year as the requirements went into effect in late August. For some this has resulted in raising stipends in order to meet the minimum salary requirement (and perhaps cutting positions) and for others this has meant a shift to non-exempt positions, leaving interns eligible for overtime pay at a rate of one and one half times their regular hourly wage. For others this has meant revamping their programs to ensure that the interns will not work more than 40 hours per week.
APPIC brought these concerns to the APA Education Directorate in order to determine how this legislation applies to psychology internships as a whole. We would like to thank Cynthia Belar and her staff at the Education Directorate for providing us with the following statement (see below) that was prepared by APA's legal counsel. As you will see it still does not provide one definitive answer, but it does provide some suggestions and could be useful in approaching your own HR Departments.
It was clear from discussions with Cynthia Belar and Susan Zlotlow that APA is not ready at this time to seek a ruling from the Department of Labor (DOL) until it has had a chance to hear from all groups that could be affected by such a decision. It is a complex issue and they want to be sure they are hearing from all stakeholders and to consider the risks and benefits of doing so. If APA ultimately decides to seek a ruling from the DOL, it is a process that would take at least six months; thus, it is clear that sites will still need to work with their HR departments to make arrangements for this year.
The major point of the APA memo is that APA seems to believe that a legitimate case could be made that the law should not apply to psychology interns as they are not "employees" in the eyes of the DOL (as interns are receiving a stipend and not wages), and thus a case could be made that they should be exempt from the law altogether. They provide six criteria at the bottom of the memo that they believe could be used to support this claim. These criteria were developed by the DOL in the past in order to make such determinations. They have also suggested to us that the APA accreditation criteria could be used to support the notion that internships meet the six DOL criteria. We have asked Susan Zlotlow if she could spell out for our membership the ways in which the APA accreditation criteria could be used to support the DOL criteria, and we will share that with our membership as soon as we receive that from her.
One issue that is not yet clear is whether making the case to the DOL that interns are not "employees" as far as DOL regulations are concerned might have some future unforeseen consequences at some sites. On one hand, it is possible that an intern could be considered an "employee" at the institution but not considered an "employee" as far as DOL regulations are concerned. On the other hand, it is possible that claiming an exemption from DOL regulations could affect the institution's willingness to consider interns "employees" and therefore might potentially have an impact on a determination for eligibility for employee benefits. This would certainly be an issue to discuss with your HR department.
We understand that this information is a step in the direction of clarifying this issue. We will continue to update you as more information becomes available. Below is the memo from APA.
Joyce Illfelder-Kaye, APPIC Vice Chair
Greg Keilin, APPIC Chair
Statement from APA:
Fair Labor Standards Act and Doctoral Interns
APA has received questions concerning the new Fair Labor Standards Act (FLSA) regulations that went into effect in August and how they might affect doctoral psychology interns. APA has started an active dialog with other entities to determine the best course of action to provide clarity concerning the status of psychology interns. Since internship sites vary considerably, the issues are complex, fact-specific, and require further discussions among various involved entities before a more definitive statement can be made.
The primary question has been "are psychology interns exempt?" The answer to this question is difficult because the term "exempt" appears to be used in three different ways. Some individuals use the term "exempt" to mean that they believe that the interns are not likely to be considered "employees" as that term is used under the FLSA and are therefore not subject to its provisions. Others refer to "exempt" to mean that they believe that the interns are subject to the provisions of the FLSA but are "exempt employees" who, under the terms of the statute, are not subject to overtime pay requirements (which are applicable to the so-called "non-exempt" employees). Finally some individuals use the term "exempt" when discussing whether psychology interns are required to be paid $23,660 annually or, alternatively, fit within the exception for the salary or fee requirement given to medical residents and others.
An initial analysis by our employment consultants (using a six part test developed by the Department of Labor (DOL) in its opinion letters which are not binding on courts but represent the DOL's enforcement position - see below *) suggests that that there is an argument that intern positions, especially if they are consistent with APA accreditation guidelines, are not subject to the FLSA (i.e., the intern is not considered an employee under the FLSA). However, since there is considerable variation in actual internship implementation, there may not be a "one size fits all" answer. Rather each internship (and each intern in each internship) would need to be assessed individually under this analysis. Some state labor laws must also be considered. Ultimately, APA in collaboration with other entities may seek a more uniform resolution that provides additional clarity for all. Currently, however, you need to speak with the HR and/or legal counsel of your institution to make an individualized determination of the impact, if any, of the new FLSA regulations on your doctoral psychology interns.
* According to DOL, an intern will not be considered an employee subject to the FLSA if the following six factors are met: 1. the training or internship, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school; 2. the training is for the benefit of the interns; 3. the interns do not displace regular employees, but work under close observation; 4. the employer that provides the training or internship derives no immediate advantage from the activities of the interns, and on occasion the employer's operations may actually be impeded; 5. the interns are not necessarily entitled to a job at the conclusion of the training period; and 6. the employer and the interns understand that they are not entitled to wages for the time spent in training or the internship. Interpretation of these factors in any given situation requires careful, individualized analysis.
4 November 2004
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