Q&A with Tanya S. Bryant
Internships typically viewed as employment, earn minimum wage
Q: What are the current employment regulations as they apply to internships?
A: The Fair Labor Standards Act (FLSA) is a federal statute that requires employers to compensate covered, nonexempt individuals the federally mandated minimum wage for all hours worked and overtime for services performed for the employer. The FLSA defines the term employ very broadly as including to suffer or permit to work. Therefore, internships in the for-profit private sector will most often be viewed as employment, unless the following six criteria are met: The internship is similar to training that would be given in an educational environment; the internship is for the benefit of the intern; The intern doesn’t displace regular employees; the employer derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded; the intern isn’t necessarily entitled to a job at the conclusion of the internship; and the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. If all of these factors are met, there is no employment relationship under the FLSA, and the employer is not obligated to pay the individual wages and overtime.
Q: What can companies do to protect themselves from possible liabilities?
A: Given the rise in legal claims for misclassifying unpaid interns, companies should be very familiar with the six criteria that determine whether the individual should be an unpaid intern or a paid intern (employee). In creating an unpaid intern program, the company should structure the internship as an educational experience that develops skills that can be applied to multiple employment settings, as opposed to skills particular to the employer’s operations. The internship should be for a fixed duration, and any documentation regarding the internship should clearly state the beginning and end dates; that the internship is unpaid; and that the internship doesn’t create an entitlement to employment. The internship should be for the primary benefit of the intern, and any benefit to the company should be incidental.
Q: How can companies minimize their risk when it comes to interns?
A: To minimize their risk, companies should engage in a thorough and detailed analysis of the company’s internship program and make a determination whether the individuals are truly unpaid interns under the FLSA. Companies should consult with legal counsel to ensure compliance with the FLSA. For companies that want to eliminate their risk, some practical advice is to pay interns at least the minimum wage to eliminate the risk of future claims from former interns.
PAULA BURKES, BUSINESS WRITER