With the economy slow to recover, many firms, both for-profit and not-for-profit are offering summer internships, rather than paid positions. Sounds good, right? The employer gets free labor, and the intern gets experience and resume enhancement. What could be better? Well, it turns out that paying a fair wage could be better because both federal and state laws prevent unfair labor practices that include much of what many interns face.
So, what are the general laws outlined by the U.S. Department of Labor’s Wage and Hour Division regulating unpaid internships? The following six criteria must all be met in order for companies to lawfully offer unpaid internships:
1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school or similar institution;
2. The training is for the benefit of the trainee;
3. The trainees do not displace regular employees, but work under close observation, instruction and supervision;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the completion of the training period; and
6. The employer and the trainee understand the trainees are not entitled to wages for the time spent in training.
The federal and state labor departments may inspect a company’s operations for compliance. Interns who feel wronged may also file for back pay and penalties, even if they agreed in writing to work for nothing. In the end, it may be better and cheaper simply to pay interns, rather than lawyers! To find out more about the Fair Labor Standards Act (FLSA) and other laws that apply to interns and work-based training, you may visit the U.S. Department of Labor’s Wage and Hour Division web site or call WHD’s toll-free helpline at (866) 4US-WAGE, (866-487-9243).
— Lawrence A. Husick, Esq.