Posts Tagged ‘internship’

Unpaid intern or upset employee?

Wednesday, April 21st, 2010

In the current recession, private employers are quickly discovering there’s no shortage of talented and skilled workers in the labor market.  The problem is not finding workers, but paying them.  So, when employers receive stacks of resumes from recent college graduates, many of whom are willing to work as a “volunteer,” some employers have started to bring the eager beavers on board as unpaid interns or trainees.  To these employers, the situation appears to be a clear win-win:  the volunteer intern gains valuable work experience while the employer receives free labor.  The only problem is that it may be illegal.

Under the Fair Labor Standards Act (“FLSA”), a worker cannot “volunteer” for a for-profit employer.  While the FLSA allows for unpaid interns or trainees,  the U.S. Department of Labor’s Wage and Hour Division (“WHD”) has developed the following six factors to evaluate whether a worker is truly an “trainee,” who is not subject to FLSA, or an “employee,” who may be subject to the FLSA:

1.    The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational institution;

2.    The training is for the benefit of the trainees;

3.    The trainees do not displace regular employees, but work under their close observation;

4.    The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;

5.    The trainees are not necessarily entitled to a job at the conclusion of the training period; and

6.    The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

Often, the difficulty for employers is to show that it “derives no immediate advantage from the activities of the trainee.” Consequently, the unpaid intern—you know, the one who’s been photocopying reams of paper for weeks in the back office—might actually be an upset employee who is eligible for back pay, including overtime payment.  Therefore, despite their good intentions, private employers need to think twice before bringing unpaid interns on board.