As summer nears and contacts are made either to students or by students regarding the possibility of internships, Employers should understand that interns who are “employed” must be paid at least the minimum wage and overtime compensation for hours worked over 40 in a work week (unless, of course, it can be shown that the intern is salaried and meets the definition of an exempt employee).
Often, however, Employers are asked to provide an internship where the student specifically seeks no compensation for the internship. Interns in certain circumstances may be provided an internship experience for which an Employer may not be required to provide compensation, but an unpaid internship must be developed and provided with care.
The federal Department of Labor permits unpaid internships where all of the six factors below are met. If the factors are met, an employment relationship does not exist between an intern and the Employer and no compensation is required:
1. The intern, even if he or she is involved in the actual operation of the facility of the Employer, is given training similar to training that would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace a regularly employed person and works under close supervision of existing employees;
4. The Employer derives no immediate advantage from the activities of the intern, and on occasion its operations may actually suffer;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The intern clearly is made aware of the fact and clearly understands that he or she is not entitled to wages for the time spent in the internship.
In order for Employers to properly protect themselves from being subject to wage and hour violations and related costs and fines, a simple yet well drafted Internship Agreement which clearly sets forth the elements of the internship is recommended. If you have any questions or require assistance in preparing an Internship Agreement, please contact John Bechtol at 412-918-1115 or email@example.com