Summer Interns – Paid or Unpaid?
Summer is rapidly approaching. For businesses, however, the “living is not always easy” (or unpaid) where interns are involved.
Rather, whether an intern must be paid minimum wage and overtime under the Fair Labor Standards Act (“FLSA”) depends upon the facts and circumstances of each situation. The Department of Labor, which presumes all workers should be paid, has established a six part test to determine if an intern can lawfully not be paid:
- The internship, though it includes actual operation of the employer’s facilities, is similar to training that would be given to the individual intern in an educational environment;
- The internship experience is primarily for the benefit of the intern, not the employer;
- The intern does not displace regular employees and works under the close supervision of existing staff;
- The employer derives no immediate advantage from the activities of the intern;
- The intern is not necessarily entitled to a job at the completion of the internship; and
- There is a clear understanding between the intern and the company that the intern is entitled to no compensation.
According to the DOL every factor must be met. Thus, should an employer use interns, even temporarily, substitutes for, or to augment existing workers, the intern must be paid. Similarly, if the intern is hired at the end of the internship, they are entitled to be paid for the entire period of the internship according to the DOL.
Issues to consider beyond pay include workers compensation (in the event of an injury), unemployment compensation at the end of the relationship, noncompetition, confidentiality and nondisclosure agreements in the event the intern is exposed to sensitive or commercially important information and, of course, discrimination.
For questions regarding interns or other employment law related topics please contact the ZKS attorney you regularly utilize or Morey Raiskin at either 407-563-4422 or firstname.lastname@example.org