Unpaid internships traditionally allow inexperienced students to gain hands-on knowledge in their field. In turn, employers use internship programs to find and test-drive new talent, increase productivity, support students and the community and take advantage of low-cost or even free labor. But sometimes these good intentions violate the Fair Labor Standards Act (FLSA).
Recent court rulings in high-profile lawsuits brought by individuals seeking compensation for being improperly classified as interns highlight the fact that employers are overlooking the FLSA and similar state laws requiring that interns who work in the capacity of a regular employee must be paid minimum wage and overtime.
Unpaid internship programs that fail to meet these requirements can result in a range of legal problems, from individual or collective actions for unpaid wages and overtime, to employer liability for unpaid taxes, unemployment compensation, employee benefits and workers’ compensation claims.
By following these 10 tips, employers can continue their summer tradition of hiring unpaid interns while ensuring that FLSA compliance is upheld:
- Do not hire an intern to perform a specialized task — such as designing the company website — for which no one else in the company is qualified. If the company is using the unique skills of an unpaid intern and not providing training, the intern will likely be considered an employee.
- Keep training general — even if it slows normal operations. Intern training should not be for the immediate advantage of the business.
- Closely supervise interns if they are doing real work, are learning and are not necessarily creating a final product.
- Ensure training or mentoring is actually provided to the interns.
- Contact local universities and community colleges for guidance and information on their programs and available candidates. Although course credit is not required, it does lend legitimacy to the unpaid internship.
- Do not replace paid employees with interns.
- Establish a definitive time frame for the internship to begin and end.
- Confirm that both parties— the intern and the business — understand that no job is promised at the end of the internship.
- Make certain that both the intern and the business agree that the internship will be unpaid.
- If in doubt, pay the minimum wage.
Unpaid internship programs that require long hours or offer non-educational menial work run the risk of attracting the attention of government regulators or plaintiff's attorneys. In light of increased DOJ enforcement, employers considering unpaid internships this summer can start by reviewing the U.S. Department of Labor guidelines for internship programs.
Thomson Reuters' online FLSA training course and Worker Classification training course explain the basic requirements of the FLSA and how to classify workers to avoid violations and maintain compliance. Online compliance training provides an easy way to ensure interns are properly supervised and not inadvertently assigned tasks that would qualify them as employees and subject employers to FLSA scrutiny and liability.
Categories: Workplace Compliance
Tags: FLSA, Worker Classification
