Some employers think it’s not necessary, reasoning that Interns are still in school, live with their parents, receive valuable experience and may even drive their own new cars to work. These employers believe using unpaid Interns is a smart financial move that allows their companies to save money on wages. However, this line of thinking has become risky based on recent court decisions and the filing of new lawsuits.
Unpaid Interns: The Landscape Has Changed
It’s getting close to summer…a time when many organizations traditionally bring in student Interns. Many of these Interns are unpaid with the idea that they are gaining valuable experience that will lead them to land future jobs. While this practice may be common in some industries, it has come under fire recently for federal and state laws.
All unpaid Internships are not illegal but an organization must meet strict requirements in order to have a legal Internship and pay nothing or less than minimum wage. If you continue to use unpaid Interns, ensure you meet the six-point test from the U.S. Department of Labor in the right-hand box.
So what is a legal unpaid Internship?
For people to be designated as Interns, and not paid, Department of Labor regulations basically stipulate that the work they do must be for their benefit, not the employer’s. That means the employer cannot use Interns to replace regular staff that have left the company or are on vacation.
An Intern’s work must be similar to what he or she would get as part of an education program, and must be closely supervised by the employer. The Intern must understand that she won’t be paid and that the Internship won’t necessarily lead to a job after he or she graduates from college.
Intern’s Work Must Be Training
An employer must pay an intern at least the minimum wage unless the Internship experience passes these six rules issued by the Department of Labor:
- The work performed (the DOL refers to it as training) is an extension of a trade studied by the student. Even though the Intern works on, or from, the business or organization worksite, the work must be “like training which would be given in an educational environment.”
- The training is for the benefit of the student Intern.
- The Intern does not replace regular employees, but instead works under close observation of employees.
- The employer derives no immediate advantage from the student Intern’s activities. In fact, “on occasion [the employer’s] operations may actually be impeded.”
- The Intern is not necessarily entitled to a job after the Internship. The employer holds out no promise of future employment.
- The employer and the Intern both understand that the Intern is not entitled to wages for the time spent in the Internship.
A little more about us:
Susan Arnold, owner and lead HR Consultant at HR On-Call, LLC. Susan has 20+ years of HR experience and provides a HR presence to business organizations without the overhead expense of a full-time employee. Susan helps business owners improve employer/employee relationships and allows them to focus on their business while resting assured that they are in full compliance with state and federal law.
Areas of expertise:
- Reduce Employer Risk and Liability
- Customized Employee Handbooks
- Performance Reviews
- Improve Employee/Employer Relationships
- Background Checks
- Personality Assessments
- Guaranteed EEO Compliance
- Employee Retention
- Recruitment / Hiring
- Employee Discipline/Discharge
Susan is passionate about her customers and listens to their needs. If you are interested in any of the details above or would like more information about her services, please contact Susan!