Hiring Summer Interns

Due to the down economy, many students and unemployed workers are looking for unpaid internships as a way to get their foot in the door. The New York Times has reported that state and federal regulators are concerned that employees are improperly using unpaid interns for free labor.

The United States Department of Labor (DOL) has recently issued a fact sheet to provide guidance internships under the Fair Labor Standards Act (FLSA) and its regulations available here. The DOL’s fact sheet uses a 6 part test to determine if an intern can participate in an unpaid internship program. The Supreme Court has ruled an than an intern who works only to serve their own interests (gaining knowledge) is not necessarily an employee (or technically suffered or permitted to work) of another person who provides aid or instruction.

To make the determination, the DOL considers the following six criteria:

1. The  internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to the wages for the time spent in the internship.

If all the above factors are satisfied, an employment relationship most likely will not exist and the minimum wage and overtime provisions do not apply to the intern. If the factors are not satisfied, the intern must be paid at least minimum wage (and overtime as applicable).

Points 2, 3 and 4 will likely be the most difficult requirements that a for profit employer will need to satisfy in order to use unpaid interns. The points collectively require that an employer is really giving the unpaid intern training, which uses the employer’s resources, and is not using the unpaid intern to perform work usable by the employer. If you are going to use the interns work product or are going to derive a benefit from their activities, employers should consider paying the intern at least minimum wage plus overtime to minimize their risk.

The image is used under the Creative Commons license from http://www.flickr.com/photos/banky177/

Be Sociable, Share!

•