Tuesday, May 27, 2014

Unpaid Summer Interns; Folks, Nothing Has Changed

The annual rites of summer are underway.  Treetops are alive with the songs of brightly-plumed birds, bees hum happily as they move from flower to flower, and warm breezes tease the tall grasses and bring occasional afternoon showers.  Students – and even some recent graduates – eager to learn a few useful skills and develop professional networks, profess their willingness to be “unpaid” interns.  Employers thank their lucky stars for getting a few months of unpaid labor.

Sounds idyllic, doesn’t it?  Sadly, for most employers, the unpaid internship part of it is just a bad dream.

We’ve previously written about how unpaid internships are rarely OK.  (Here)  Apparently, many employers are in denial, as there are plenty of news reports about class action lawsuits against businesses that failed to pay their interns.

We’ve even had several employers tell us recently that they "heard" unpaid internships are now allowed by the federal government as part of some new economic stimulus program.  That’s simply wrong.  Putting aside the obvious question of how not paying someone for working creates any economic stimulus, the bottom line is that such ideas are nothing more than wishful thinking.

The rules that control unpaid internships have not changed appreciably in years.  In a nutshell, interns must be paid at least the minimum wage, plus time and a half for all hours worked beyond 40 in a work week, unless all of the following criteria are met:
  • the internship is similar to training that would be given in an educational environment;
  • the experience is for the intern’s benefit, not the employer’s;
  • the intern doesn’t displace regular employees, but works under close supervision of existing staff;
  • the employer derives no immediate advantage from the intern’s activities, and its operations actually may be impeded;
  • the intern is not necessarily entitled to a job at the end of the internship; and
  • the employer and the intern understand that the intern isn’t entitled to wages for the time spent in the internship.
Government agencies and non-profits can have unpaid interns, but private-sector employers generally can’t.  Consequences for misclassification of interns can include back wages, overtime, benefits, penalties, and more.  So, if your business is determined to have an internship program, take the time to ensure that it meets all applicable federal and state requirements.

For more information, you can check out the U. S. Department of Labor’s fact sheet “Internship Programs Under the Fair Labor Standards Act.”  (Here)

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