Courts Expand on Meaning of 'Employee'

Are welfare recipients who participate in mandatory Work Experience Programs (WEP) protected by statutes such as Title VII and the FLSA? In an expansive reading of the definition of employees, two federal courts recently ruled that such “workers” are “employees” within the meaning of the federal statutory scheme and, therefore, may seek relief for discrimination at the workplace or for compensation for excess work.

In the first case, the Second Circuit held that an employer-employee relationship exists when a person is compelled to work in order to receive certain benefits, even if such benefits stem from public assistance. United States v. City of New York, 359 F.3d 83 (2d Cir. 2004). In the other case, a Northern District judge held that the FLSA may allow WEP participants to seek compensation for work performed in excess of the program's mandated number of hours. Stone v. McGowan, 2004 WL 415227 (N.D.N.Y. 3/2/04) (Mordue, J.)

In both cases, plaintiffs were individuals on public assistance who, as a condition of the receipt of welfare benefits, were required to work at various activities arranged by their social service districts. The plaintiffs in the first case were subjected to sexual and racial harassment at their work place while the plaintiff in Stone worked beyond the minimum hours required to receive his benefits. The Second Circuit ruled that the WEP workers were employees under Title VII even though they received no direct remuneration from employer. However, because plaintiffs' cash payments, food stamps, and child-care expenses were dependent on the number of hours they worked, they satisfied the definition of an “employee” under Title VII. Adhering to this broad definition of an employee, the court in Stone determined that plaintiff was an employee under the FLSA sufficient to seek compensation and damages for his extra hours of work.

Time will tell whether these decisions will serve to expand the coverage of federal discrimination statutes to less traditional or orthodox employment settings such as internships.

Are welfare recipients who participate in mandatory Work Experience Programs (WEP) protected by statutes such as Title VII and the FLSA? In an expansive reading of the definition of employees, two federal courts recently ruled that such “workers” are “employees” within the meaning of the federal statutory scheme and, therefore, may seek relief for discrimination at the workplace or for compensation for excess work.

In the first case, the Second Circuit held that an employer-employee relationship exists when a person is compelled to work in order to receive certain benefits, even if such benefits stem from public assistance. United States v. City of New York , 359 F.3d 83 (2d Cir. 2004). In the other case, a Northern District judge held that the FLSA may allow WEP participants to seek compensation for work performed in excess of the program's mandated number of hours. Stone v. McGowan, 2004 WL 415227 (N.D.N.Y. 3/2/04) (Mordue, J.)

In both cases, plaintiffs were individuals on public assistance who, as a condition of the receipt of welfare benefits, were required to work at various activities arranged by their social service districts. The plaintiffs in the first case were subjected to sexual and racial harassment at their work place while the plaintiff in Stone worked beyond the minimum hours required to receive his benefits. The Second Circuit ruled that the WEP workers were employees under Title VII even though they received no direct remuneration from employer. However, because plaintiffs' cash payments, food stamps, and child-care expenses were dependent on the number of hours they worked, they satisfied the definition of an “employee” under Title VII. Adhering to this broad definition of an employee, the court in Stone determined that plaintiff was an employee under the FLSA sufficient to seek compensation and damages for his extra hours of work.

Time will tell whether these decisions will serve to expand the coverage of federal discrimination statutes to less traditional or orthodox employment settings such as internships.