It is that time of year when many employers begin to hire or consider hiring student interns for the summer. Employers can make the mistake of assuming that simply because a person is given the title of “Intern” the individual does not have to be paid. That assumption can be a trap resulting in significant unpaid wage liability for an employer under federal and state law.
Under the Fair Labor Standards Act, the Wage and Hour Division of the United States Department of Labor has created six criteria that must be met in order for an internship to be unpaid:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer providing the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded by the internship;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The Employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If any of the above criteria are not met, the internship must be paid. Even if unpaid, interns must be treated the same as all other employees with respect to anti-discrimination, retaliation and all other federal and state employment laws.