We are going to discuss unpaid internships and whether they're really worth the hassle.
A fact sheet issued by the U.S. Department of Labor outlines six criteria that categorize employment as an internship rather than paid employment:
1. The internship is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. 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;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The fact sheet also states that internships in the "for-profit" private sector will most often be viewed as employment, unless the test described above relating to trainees is met. Companies that offer unpaid internship programs which don't meet FLSA guidelines may expose themselves to penalties and lawsuits.
When it comes to internships, make sure the program and, in particular, the work assigned benefit the intern rather than the employer. Make sure the assignments entail meaningful, hands-on industry training and not just field trips to the deli to pick up lunch or endless hours at the copy/fax machine.
Another way to help steer clear of FLSA infractions is to simply pay your interns. According to Maurice Pianko, a labor lawyer involved in many intern lawsuits, "A paid internship requires all workplace protections and regular employee benefits." This is not necessarily a commitment every company wants to make.
Keeping a vigilant eye on the educational framework and the type of work assigned to interns can help keep your program on the right path.
Our section on Employee Pay features information on other common federal wage issues.
Be sure to download our FREE Federal Labor Law Penalties by Company Size Chart to help you understand the penalties for not complying with the federal labor laws that apply to your business.