For many years, employers have used “unpaid interns” as free labor. In down economic times, employers have exploited interns while the interns work hard in hopes of being rewarded with a paid position. That is the way things used to work. Often, these days, employers gave use interns to replace paid employees and keep costs down.
There are signs, however, that the “unpaid intern” concept may be returning to its former definition, as the Department of Labor has clarified regulations in place so that unscrupulous companies can’t take advantage of unpaid interns who should be paid.
The Department of Labor notes that the Fair Labor Standards Act (FLSA) definition of the term “employ” is very broad, and includes any employee who has to “suffer or permit to work.” That means the law requires that all covered and non-exempt individuals who are “suffered or permitted” to work have to be compensated for the services they perform for the employer. When it comes to internships in the “for-profit” private sector, unless the employee passes the “Test for Unpaid Interns,” which relates to trainees. Unless they fit well within that test will qualify as regular employees and will be subject to wage and hour laws, including being subject to the minimum wage and overtime compensation for any hours over forty worked in a seven day period.
The Test For Unpaid Interns details the circumstances under which participants in internships or training programs in the “for-profit” private sector may do so without compensation. According to the Supreme Court, the term “suffer or permit to work” cannot be used to make one person whose is working in their own elf interest the employee of another who simply provides aid or instruction. This would apply to interns who are part of a work-study program or a training program that meets certain criteria. Whether or not the internship or training program meets this exclusion depends upon all aspects of each such program, and whether or not it fits all six of the following criteria:
- The internship, even if it includes actual operation of the employer’s facilities, must be functionally similar to the training which would be given in an educational environment;
- The internship experience must be entirely for the intern’s benefit;
- The intern’s work much not displace regular employees, but rather performs work under close supervision of existing staff;
- The employer providing the training derives no immediate advantage from the intern’s activities, and the employer may find operations to be impeded on occasion.
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- Both the intern and the employer understand that the intern is not entitled to wages for time spent in the internship.
Unless every single one of the factors listed above have been met, an employment relationship exists under the FLSA, and the Act’s minimum wage and overtime provisions necessarily apply.
If you have worked as an “unpaid intern” and satisfy the test above, you are entitled to overtime pay. Please contact the Overtime FLSA Pay Lawyers at Hill Law Firm to discuss your Overtime Pay Rights. Since Unpaid Interns May Be Entitled to Overtime Pay, it is important that you consult with an experienced FLSA attorney today.