While the temperatures this morning didn’t feel much like summer, the season is upon us. And be honest — when you think of summer do you think a) hot dogs or b) wage & hour issues for interns? If you answered b), you probably need some help.  Which is why my colleague Jarad Lucan has drafted this timely post to remind us all about the rules of the road for interns.

While we have discussed the rules on unpaid interns in the past, it seems that every summer a court gives employers a reason to review their internship programs to make sure that they comply with the requirements of the Fair Labor Standards Act (FLSA).

Recently, a federal judge in the Southern District of New York granted a conditional certification of a possible nation-wide class action involving current and former unpaid interns of Warner Music Group.

Essentially, the interns claim they were entitled to the minimum wages and overtime because they performed similar work as actual employees, did not receive academic credit, and Warner derived a direct benefit from their work.

In order to assist employers with designing a valid unpaid internship program, the Department of Labor (DOL) has outlined six factors to determine whether an intern is exempt from wage an hour laws.  We’ve touched on them before but they are worth repeating here:

  • 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;
  • 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;
  • 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 intern is not 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.

But, in plain English, what do these factors really mean?

Put simply, the first two factors mean that the primary purpose of your internship program must be for the intern to learn, with performing work being only secondary.

The third, fifth, and six factors mean that your internship program should clearly set out which current employee will oversee the intern, and that the intern will not be offered a job following completion of the program.

The fourth factor means that the intern is essentially getting in the way of your operations. As a reminder, all six factors must be met for your unpaid internship program to pass scrutiny.

No doubt hiring unpaid interns is now a risky endeavor. If you have some this summer, make sure that they meet the DOL’s guidance on the subject.  Once you’ve done so, you can enjoy the summer.