Internship Programs under the FLSA

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Many organizations use internship programs, and these programs can have many advantages for the employer and the intern. However, employers that hire interns must be aware of the rules that apply to interns under the Fair Labor Standards Act (FLSA).

The FLSA requires most employees of for-profit employers—including interns—to be compensated for their services. Unpaid internships are generally permissible in the public sector and for nonprofit charitable organizations. However, interns of for-profit private sector companies generally must be paid at least the minimum wage and receive overtime compensation. There is a very limited exception to this rule for trainees who participate in an internship program for their own educational benefit.

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Supreme Court Ruling Allows Employers to Require Arbitration and Bar Class-Action Lawsuits

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OVERVIEW

On May 21, 2018, the U.S. Supreme Court ruled that employers can use arbitration clauses in employment contracts to bar employees from filing class-action lawsuits related to wage and overtime claims. In a 5-4 split decision, the court determined that employment agreements can require arbitration, waiving the employee’s right to participate in a class-action lawsuit, to settle these disputes.

This ruling is a departure from the position taken by the Obama administration and the National Labor Relations Board (NLRB). Instead, the decision favors employers and follows President Donald Trump’s position on federal employment law that employers are entitled to waive their employees’ right to file class-action lawsuits under the Federal Arbitration Act (FAA).

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Affordability Percentages Will Increase For 2019

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OVERVIEW

On May 21, 2018, the Internal Revenue Service (IRS) issued Revenue Procedure 2018-34 to index the contribution percentages in 2019 for purposes of determining affordability of an employer’s plan under the Affordable Care Act (ACA). For plan years beginning in 2019, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 9.86 percent of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
  • 8.3 percent of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance).

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Covered Establishments in All States Must Now Submit OSHA Electronic Reports

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OVERVIEW

On April 30, 2018, the Occupational Safety and Health Administration (OSHA) announced it will require all establishments affected by the electronic reporting rule to submit their 2017 data to OSHA by July 1, 2018.

This announcement clarifies the requirement for establishments in states with an OSHA-approved plan. These establishments must submit electronic reports, regardless of whether the state has ratified or incorporated the electronic reporting rule into its OSHA state plan.

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HHS EXTENDS TRANSITION POLICY FOR NON-ACA COMPLIANT HEALTH PLANS

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OVERVIEW

On April 9, 2018, the Department of Health and Human Services (HHS) extended an existing transition policy for certain health plans that do not comply with the Affordable Care Act (ACA) for an additional year, to policy years beginning on or before Oct. 1, 2019.

In states that allow it, health insurance issuers have the option of renewing current policies for current enrollees without adopting all of the ACA’s market reforms that took effect in 2014. Originally announced in 2013, the transition policy has already been extended several times.

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