As further proof of the United States Department of Labor’s increasing efforts to crack down on non-compliant employers, two professional sports teams – San Francisco Giants and Miami Marlins – are reportedly under federal investigation. This should serve as an important reminder to smaller employers that they need to be vigilant about their compliance efforts and pay practices – after all, even large employers can make such mistakes, which can be costly in terms of taking away from time from running your business and defense expenses. It is critical to understand most of these alleged pay practice violations are technical in nature and do not evidence malicious intent. However, generally intent is not required to prevail in these actions and errors can lead to class-wide implications. It is important to speak with an experienced employment lawyer to review your pay practices and ensure that your business is in compliance before a government audit or private lawsuit is commenced.
It has been reported that the US Department of Labor is investigating the San Francisco Giants for potential wage and hour violations. Specifically, it is alleged that the San Francisco Giants did not possibly pay its interns. These types of lawsuits are becoming more and more prevalent in recent years. The following six criteria must be applied when analyzing whether an unpaid internship is allowed:
FACTORS TO CONSIDER WHEN USING AN INTERN
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the
time spent in the internship.
The team stated it could not comment on the current investigation. This is not the first allegation of improper pay practices against the Giants. Indeed, this is the second recent investigation of the Giants for improper pay violations. In August 2013, it was announced that the Giants had agreed to pay over $540,000.00 in back wages and damages to more than 70 employees. It was alleged that these employees were not paid the federal minimum wage of $7.25 or overtime in accordance with the law. Further, according to the DoL, the Giants were alleged to have improperly classified some workers as exempt from overtime pay, including but not limited to clubhouse managers and video operators. Moreover, it is alleged that the San Francisco Giants paid $500,000 to settle a class action lawsuit brought by over a group of security guards, who had claimed they were owed back pay for overtime and for working through breaks and meals. Non-payment for working during meals and breaks are also claims on the rise. Some industries have specific requirements for meal and rest breaks.
In addition, it has been reported that the Miami Marlins are under investigation for alleged improper pay practices as well. Nothing has been proven against the club to date. Both of these cases are important reminders for all companies to evaluate their workforce. Call our office at (800) 893-9645 to confidentially speak with an experienced employment lawyer to learn about your compliance practices, best practices and your potential exposure before there is any threat of a lawsuit or government audit.