As employers struggle keep business operating expenses low, the number of unpaid internships has increased in recent years, causing the federal government to express concern that employers may be unknowingly violating wage and hours laws when using unpaid interns.Ìý While the U.S. Department of Labor (DOL) continues to enforce wage-hour laws, the agency is digging deeper with the announcement of its desire to eliminate the unlawful use of unpaid interns by "for-profit" companies.Ìý The problem is that most "for-profit" companies that use unpaid interns may not be aware they are violating wage and hour laws, leading DOL to issue guidance on the subject.Ìý
Students often seek out opportunities for unpaid internships in order to gain valuable experience relative to a particular career ambition and for many employers, this practice is a welcomed one as budgets remained strained and the cost of employing additional workers continues to increase.Ìý But according to a issued by DOL in April 2010, "internships in the 'for-profit' sector will most often be viewed as employees," and those who "qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek."Ìý So, with a few exceptions for work performed as a part of an education program, "for-profit" companies will be required to pay interns for any work performed, and offer additional protections extended to employees, such as workers compensation, unemployment insurance, and protection under employment discrimination laws.
According to DOL, a worker for a "for-profit" company may be considered for an unpaid internship only if all of the following six criteria are met:Ìý
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment. DOL explains that the more an internship program is structured around a classroom or academic experience as opposed to the employer's actual operations, the more likely the internship will be viewed as an extension of the individual's educational experience. Specifically referenced is oversight of the program by a college or university where educational credit is provided.ÌýÌý
- 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. This also includes temporary work done by the intern. For example, if the intern fills in for the receptionist or any other regular worker during specific time periods or when the regular employee is on vacation or sick leave, then the intern status will be lost. In addition, if the employer would have hired an employee to perform the work that an intern is doing, the intern must be declared an employee. DOL specifically states that if the intern "performs no or minimal work, the activity is more likely to viewed as a bon fide education experience" and if the intern receives the same level of supervision as the regular employees, it is likely that the intern is actually an employee as well.Ìý
- 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. The agency describes the work that an intern can perform; specifically stating that the work should not be routine work of the business on a regular and recurring basis, and the business should not be dependent on the intern. If the intern is engaged in such work as filing, clerical work, or assisting customers, then the employer would be considered the beneficiary of the intern's work and must therefore declare the intern an employee.Ìý
- The intern is not necessarily entitled to a job at the conclusion of the internship. The internship should be limited to a specific period of time that is determined before the start of the internship, and should not be used as a working interview or trial period for those seeking employment.
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.