Employers who use summer interns should be aware that interns may be entitled to certain protections under the labor laws.
Generally, interns are considered to be employees entitled to minimum wage and overtime protections. This is true regardless of whether the interns agree that their service could be unpaid because the Fair Labor Standards Act (FLSA) does not allow employees to waive their entitlement to wages. Only if the intern is truly a “trainee” as defined by the FLSA might he or she be exempt from the wage and hour protections under that law. The Department of Labor applies six criteria to determine whether an individual qualifies as a trainee.
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.
See U.S. Dep’t of Labor Fact Sheet #71 (April 2010).
Employers who are uncertain as to whether their interns fall within the trainee exception should consider the following questions that are based on the Department of Labor’s six criteria: is the internship primarily for the benefit of the intern; does the internship qualify for educational credit; does the intern receive close or constant supervision; is the intern performing minimal work that actually benefits the employer; is the internship of a fixed duration; and, will the intern be returning to school or otherwise be ineligible for permanent hire directly following the conclusion of the internship period.
Employers may also want to document the relationship through an engagement letter that outlines the parties’ expectations for the relationship, particularly the training and skill development benefits that will be offered to the intern. Additionally, employers should consider keeping records of how much time interns spend working. Such records could be helpful in any future litigation challenging the nature of the relationship.
In addition to the wage and hour laws, interns may also be protected under anti-discrimination laws. State and local laws may extend such protection even to unpaid interns falling under the trainee exception of the FLSA. For example, the New York City Council recently passed a bill to expand the New York City Human Rights Law to allow harassment and discrimination claims brought by unpaid interns who are not “employees” under the FLSA, making New York City one of the first cities to give explicit discrimination protection to unpaid interns.
In light of the protections afforded to interns, employers should carefully assess their internship programs to ensure that they are in compliance with all applicable federal, state, and local laws.