Velarde v. GW GJ, Inc.

Summary

The Second Circuit held that the *Glatt* "primary beneficiary" test—previously used for unpaid interns—applies to determine whether students at for-profit vocational schools are "employees" under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). Applying that test, the court found that a cosmetology student who completed state-mandated training hours in the school's salon was the primary beneficiary of the relationship, and thus not an employee entitled to wages, where the student paid tuition, received supervised hands-on training required for licensure, and did not allege the school's program was deficient or that he replaced paid employees. The decision affirms that vocational schools may require unpaid practical training as part of a state-approved curriculum without triggering compensation obligations under the FLSA or NYLL.

Holdings

1. The primary beneficiary test applies to vocational school students, and under that test, Velarde was the primary beneficiary of his relationship with the Academy and therefore not an employee under FLSA and NYLL.

Questions Presented

1. Whether students at a for-profit vocational school who complete state-mandated training hours as part of their education are 'employees' entitled to minimum wage under FLSA and NYLL; and whether the 'primary beneficiary' test applies to such students.

Disposition

affirmed