{4:36 minutes to read} There are times when an employer may seek to hire an intern without compensation. On the surface, it would appear to be a mutually beneficial quid pro quo arrangement which allows an employer to hire a student to work for free and provides a student with working experience in a field related to that student’s desired career path. However, as mutually attractive as such arrangements may appear to be, this type of arrangement can cause significant problems for an employer who enters into it blindly.

The Fair Labor Standards Act (FLSA) defines the term “employ” very broadly, including “suffer or permit to work,” meaning that, under the law, interns must be compensated for the services they perform for an employer. Internships in the “for-profit” private sector will most often be viewed as employment unless the following tests are satisfied:

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 a general rule, the more an internship program is designed as an academic experience as opposed to being connected to the employer’s actual operations, the more likely the internship will be viewed as a part of the individual’s educational experience and not as employment.

The arrangement will more likely be viewed as an internship if the intern is provided the chance to use skills that can be useful in multiple employment settings, rather than skills particular to one employer’s operation. For example, if the intern is performing work related to the employer’s operations that are customarily performed by employees, then the fact that they also may be receiving some educational benefits will not exclude them from the FLSA’s minimum wage and overtime requirements because the employer is benefitting from the intern’s work.

The best practice for an employer seeking to use an intern would be to coordinate with the intern’s school to structure the program so it resembles an academic experience as opposed to an employment experience. This can be accomplished by working with a college that oversees the program and providing course credit to the interns.

In addition, it should be mutually established at the outset that the internship is of a fixed duration. The employer should not use interns as substitutes for regular workers or as supplements to the existing workforce. Interns should be observing various jobs, thereby allowing them to learn skills under the supervision of the employee.

 In summary:

• If the internship is a learning experience that provides no benefit or contribution to the employer’s operations, it will more likely be deemed a valid internship.

• If the intern spends his or her time filing papers, fetching coffee, or doing work performed by an employee, the employer has created an employment situation and must pay the intern accordingly.

In the event of a situation where the intern’s function involves doing a little of both, the employer would be well advised to pay the intern no less than the standard minimum wage, a decision that could save the employer far more money in the long run.

Alan Krystal

Alan H. Krystal, P.C.
631 780 6555
Alan@alankrystallaw.com