June 20, 2017
Avoid Losing New Hires to Counteroffers

Often times, these other employers, already have a strategy for handling this very type of situation and are likely prepared to counteroffer in an effort to change their employee’s decision to leave. And nowadays, employers are far more sophisticated about counteroffers than in days gone by. They used to be based mostly on compensation, but companies are now addressing these issues in a more global way, by looking at everything from different work assignments to title changes.
Understanding a candidate’s motivations for a career move is vital to fending off the threat of a potential counteroffer. If someone is leaving their current employer for money, they are likely to stay for it, too. If you want to avoid losing a new hire to a counteroffer, consider the following:
- Discuss the possibility of a counteroffer with the candidate during the interview process
- Find out more about any other opportunities a candidate is exploring
- Maintain regular contact with the candidate through their notice time
- Send links to articles or share a recently published annual report
- Share company updates and department developments
- Arrange a lunch with their new boss or colleagues
- Schedule “meet-the-team” meetings immediately
For you it might just be another hire, but for the candidate it is a life-changing event – a new route to work, new coworkers, new places and new routines. With this comes some degree of uncertainty, fear, and apprehension. Conveying a genuine interest in the candidate and making them feel like they are already a part of the team, even before their start date, can reduce the temptation to follow up with other recruiters or go on any remaining interviews.
Answer: One of the primary issues you face is in paying or not paying your interns. The Fair Labor Standards Act FLSA, which sets standards for the basic minimum wage and overtime pay, affects most private and public employment. Covered and nonexempt individuals who are “suffered or permitted” to work must be compensated under the law for the services they perform for an employer. Internships in the for-profit private sector will most often be viewed as employment, unless the test described below relating to trainees is met.
Interns in the for-profit private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage as well as overtime compensation for hours worked over 40 in a workweek.
Test for Unpaid Interns
The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances, and the following six criteria must be applied when making this determination:
If all of the above factors are met, an employment relationship likely does not exist under the FLSA, and the act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very broad.
Important: As of May 25, 2016, the Second Circuit New York, Vermont, and Connecticut and the Eleventh Circuit Alabama, Georgia, and Florida have rejected the Department of Labor’s six-factor test and have adopted the “primary beneficiary” relationship test, which takes into account the economic reality between the intern and the employer. The primary beneficiary relationship test has seven factors:
In examining these factors, no one factor is dispositive and courts should weigh the factors to determine the appropriate result depending upon the facts before them. The factors are also not exhaustive and, in certain situations, additional evidence may be appropriate to consider.
Here is our practical advice before you hire an intern:
Once the intern is on board: