ALSO: Spelling Out Hiring Policies : No Stalling on 401(k) Payments : Importance of Leading by Example

Q My brother has been working for a major stock brokerage as a summer intern. He is not getting paid for the “internship,” which will only last one summer--between the two years he is studying full-time to get his MBA. The job earns no college credit, nor is it required for the MBA program.

Although the main reason for the job is to get his feet wet in the industry and to enhance his resume, isn’t he entitled to receive at least the minimum wage?

--D.E., Tustin

A This presents a rather complicated issue. State and federal wage and hour laws permit business organizations to operate internship programs for students without requiring that those students be paid.

Some of the criteria considered in determining whether such students may be paid include:

* Whether the interns displace regular employees of the business.

* Whether the business obtains any immediate advantage (as opposed to long-term “goodwill”) from the internship program.

* Whether the interns are trained to perform specific jobs within organization as opposed to given a more general educational experience.

* Whether interns are guaranteed a job at the end of the internship.

* The actual understanding of the parties (which may be evidenced by advertisements for the internship) concerning whether the internship will be paid.

Essentially, if an internship program primarily benefits the intern and has some link to the intern’s education (actual academic credit is not required), it is less likely to be considered an employment relationship for which wages would have to be paid. On the other hand, an employer cannot have unpaid interns perform the work of its regular employees, nor can it use an unpaid internship program to provide on-the-job training for its own future employees.

Depending upon where your brother’s situation fits within these various tests, he may wish to contact the U.S. Department of Labor or the California Division of Labor Standards Enforcement for further advice.

--James J. McDonald Jr.

attorney, Fisher & Phillips

labor law instructor, UC Irvine

Hiring Policy Belongs in Personnel Manual

Q I am a board member of a nonprofit corporation. Our existing bylaws, board policies and personnel manual contain no mention of the legal requirement that employers in the United States only employ citizens, legal residents, or immigrants who have official U.S. approval to work. What are employers who want to obey the law in hiring supposed to do?

A fellow board member suggested that putting language in the personnel manual about checking the work eligibility of applicants is foolish because the personnel manual is given out only to people after they are hired. But my thought is that this language would tell existing employees of our policy so they will “pre-screen” friends or relatives who inquire about possible employment with the agency. This will avoid embarrassment and waste of time for all concerned, as ineligible persons will know not to apply.

--R.B., Los Angeles

A The federal Immigration and Control Act requires that employers hire only persons legally entitled to work in the United States, and specifies the kind of information that employers should seek from new employees in order to comply with these obligations.

I agree with you that there is nothing foolish about stating in your organization’s handbook that you will comply with the requirements of the law. Many employers do so for a variety of reasons, including the one that you cite.

--Michael A. Hood

employment law attorney

Paul, Hastings, Janofsky & Walker

Employer Can’t Stall on 401(k) Payments

Q I work for a local hospital that allows employees to contribute up to 15% of pay to a 401(k) plan. The plan is managed by a contract company. The employer deducts my 401(k) from every paycheck and holds the money for two to three months before sending it to the contract company to buy mutual funds.

Is this legal? Is there anything I can do about the situation?

--J.W., La Habra

A Employers are required to forward Section 401(k) contributions to the plan as soon as they can be reasonably be segregated from the employer’s other assets, but not later than 90 days after the amounts are withheld from employees’ paychecks. The U.S. Department of Labor has made it very clear that employers cannot automatically hold onto those funds for 90 days before forwarding them to the plan.

Your first step to correct this problem should be to notify the employer in writing to request that it forward the funds to the plan on a more timely basis. If that fails you can contact the Labor Department’s office in Pasadena for assistance.

--Kirk F. Maldonado

Employee benefits attorney

Riordan & McKinzie

Supervisor Fails to Lead by Example

Q My supervisor is chronically Late to work and leaves early nearly every day, even when we have a backlog of work to do. However, she is quick to point out when the rest of us are even five minutes late to work. She even questions us when we take sick leave, and lectures us on how vital attendance is.

What can I do? Should I ignore this, or point it out to someone higher up?

--V.R., Whittier

A One of the most effective (and easiest) ways to be a good workplace leader is to lead by example. It is very hard for a supervisor to encourage good attendance in employees when she or he is chronically late and absent. It is too bad that your supervisor does not realize this. Moreover, it is not good supervisory practice to question employees’ sick leaves, particularly if there is no indication that the sick leaves are not valid.

Is this supervisor approachable? Can you talk to her about it without fear of retaliation? Perhaps you could suggest a group meeting with all employees to discuss attendance issues. The next time your supervisor scolds someone for being late or questions their sick leave might be a good time to suggest the meeting.

If the opportunity presents itself, you should discuss the issue with someone higher up in the organization.

--Ron Riggio

Director, Kravis

Leadership Institute

Claremont McKenna College

If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626 ; dictate it to (714) 966-7873; or, e-mail it to shoptalk@latimes.com. Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice.