Unpaid Internships: Do They Violate the FLSA?

Sheppard Mullin Richter & Hampton LLP

The U.S. Department of Labor (“DOL”) is cracking down on unpaid internships, finding that few “for-profit” employers can offer such internships without violating the Fair Labor Standards Act (“FLSA”).

The DOL issued a “Fact Sheet” to help employers determine whether their unpaid internship programs comply with the FLSA. If the following six elements are satisfied, an employment relationship most likely does not exist and thus the intern does not need to be paid: (1) The internship 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 instead works under close supervision of existing staff; (4) The employer providing 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 at the internship.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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