Thank You For Submiting Feedback!
The primary beneficiary test best captures the United States Supreme Court's economic realities test in the student/employee context and that it is therefore the most appropriate test for deciding whether students should be regarded as employees under the Fair Labor Standards Act.
Plaintiff were students of cosmetology and hair design at schools in California and Nevada operated by defendant B&H Education, Inc., under the name of Marinello Schools of Beauty. Plaintiffs filed suit against defendant under the Fair Labor Standards Act, claiming that they were employees within the meaning of the Fair Labor Standards Act ("FLSA"), and under California and Nevada state law, on the ground that much of their time was spent in menial and unsupervised work, and that they were therefore entitled to compensation. Plaintiffs moved for summary judgment, and defendant filed a cross-motion for summary judgment. The district court granted summary judgment in favor of the defendant. Plaintiffs appealed.
Could the plaintiffs be considered “employees” within the meaning of the FLSA, thereby rendering the grant of summary judgment in favor of the defendant an error?
The Court held that the district court properly granted summary judgment to the defendant since under the "economic reality" test, the students were not employees within the meaning of the FLSA, 29 U.S.C.S. § 203(e)(1), (g), even though they alleged that much of their time was spent in menial and unsupervised work. The plaintiffs were not employees entitled to be paid under Nevada or California law. The Court further held that a "primary beneficiary" analysis, rather than a test formulated by the Department of Labor, applied to student workers, and the students, not the company's schools, were the primary beneficiaries of their own labors because at the end of their training, they qualified to practice cosmetology.