With summer approaching, some employers may be looking to bring in interns during their break from school. Internships are great as they provide students with real-world training and experience, which supplements the learning that they get in the classroom. For employers, they are able to give back to the community, help a student gain experience, and they may even find a valuable future employee. However, care must be taken in how an employer uses interns, especially if it is an unpaid internship.
Generally, the Fair Labor Standards Act (“FLSA”) requires employers to pay individuals at least the minimum wage for all work that is “suffered or permitted to be worked.” That is a very broad term and essentially obligates an employer to pay any individual that performs any work for it. Thus, the Department of Labor (“DOL”) could find that an unpaid intern is actually an employee and is therefore owed at least the minimum wage for all hours worked.
However, the Supreme Court has held that the term “suffered or permitted to work” does not include a person whose work serves only his or her own interests. This is how an employer can have an unpaid intern. The DOL has, therefore, established six criteria for determining whether the internship may be unpaid. If all of the factors are met, an employment relationship does not exist under the FLSA.
1. The internship, even though it includes actual operations at the facilities of the employer, is similar to training that 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 the 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.
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Note that the overriding intent by these factors is that the unpaid intern is not to be just an extra employee, who the employer gets to use for free. Thus, they should not be doing a job that employees normally do (#3), and the employer should not derive any benefit from things the intern does (#4). If an employer wants the intern to do work an employee normally does, the employer should pay the intern for that work since the employer is obtaining something of value from the intern.
Instead, the internship should be more educational. Interns are not there to work all day; they are primarily there to observe and learn.
