Unpaid Internships Under Attack
By: Morey Raiskin
More and more frequently, employers are utilizing internship programs to provide training opportunities and, frankly, to screen for potential future hires. When the internship program is unpaid, more and more frequently, the interns or former interns sue claiming they are (or were) employees entitled to be paid.
In September 2015, the United States 11th Circuit Court of Appeals (with jurisdiction over employers in Florida), in a case involving 25 former student registered nurse interns who sought to be compensated as employees for time spent in the clinical portion of their curriculum, ruled that the “proper question is whether the intern or the employer is the primary beneficiary of the relationship.”
After refusing to establish any bright-line test to resolve the issue of whether interns must be paid, the Court reasoned that the outcome to this “highly individualized inquiry” hinges upon the following seven “non-exhaustive” considerations when determining whether unpaid interns should be paid – –
- The extent to which the intern and the provider of the internship understand there is no expectation of compensation.
- The extent to which the internship provides training similar to what is given in an academic or educational environment, including hands-on training provided by educational institutions.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees, while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Given the absence of a definitive answer to the question, and the cost of modern-day litigation both in terms of dollars and managerial time, pragmatic employers should simply opt to pay interns minimum wage (or more, if competitively necessary) to avoid the cost of litigation or an uncomfortable “audit” by the Department of Labor, Wage and Hour Division. However, should an employer in Florida nevertheless want to utilize an unpaid internship, care should be taken to, at a minimum, provide a writing (or, preferably, several) clearly delineating that: (1) the internship is unpaid, (2) a post-internship job is not guaranteed, and (3) candidates who receive course credit are preferred. Conservatively, employers should also take additional precautionary steps such as having the internship program certified by (or coordinated through) an academic institution whenever possible. Finally, frequently during the internship senior members of management should regularly speak to interns, mentor interns and train the interns. Ultimately, however, and regardless of number of precautions an employer utilizes, simply paying the intern removes all doubt that the internship program is lawful.