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Revenge of the Interns! Department of Labor Continues Emphasis on Unpaid Internships

Posted in Human Resources (HR) Compliance, Laws and Regulations, Wage & Hour

As if to say, "…And We Really Mean It", the United States Department of Labor continued its publicity campaign on the issue of unpaid interns by releasing a Fact Sheet this week on whether and when interns need to be paid minimum wage or be treated as employees.

If you recall, earlier this month, the New York Times ran an article on this very topic, which I discussed in an post here

Fact Sheet 71 — entitled " Internship Programs Under The Fair Labor Standards Act" sets forth a six-part test to determine whether the individuals are more akin to employees, than interns.  As the Fact Sheet is quick to state, a determination will depend on all the facts and circumstances of the situation, but these factors are to be examined closely:

  1. The internship, even though it includes actual operation of the facilities of the employer, 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.

As this post from the Ohio Employer’s Law Blog on the subject points out though, the DOL is going to be skeptical of such arrangements. The DOL Fact Sheet states: 

[I]f the interns are engaged in the operations of the employer or are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer benefits from the interns’ work…. If an intern is placed with the employer for a trial period with the expectation that he or she will then be hired on a permanent basis, that individual generally would be considered an employee under the FLSA

As the summer season approaches, employers are now on notice that their use of interns is going to be under closer scrutiny than ever before.