Can You Hire Unpaid Interns?

As the temperature rises, so do the number of job applications and résumés found in an employer’s mailbox.  It isn’t any secret that college students nation-wide are aggressively applying for summer jobs or internships that will provide them with the experience they need after graduation.  It also isn’t any secret that employers, in this difficult economy, do not have excessive amounts of money available to hire and pay these individuals. This may bring you to ask: Can my business hire unpaid interns for the summer?

It depends.  The Fair Labor Standards Act (FLSA) provides that those who are employed, defined as “suffered or permitted to work,” must be paid for the services they perform for an employer. According to the Department of Labor’s Fact Sheet regarding internship programs, most internships in the “for-profit” sector will be viewed as employment, and thus, the individual must be properly compensated, unless a six part test is met to classify that individual as a trainee rather than an employee.

The six criteria that must be met in order to properly hire someone as an unpaid intern are as follows:

  1. The internship must provide training similar to training the individual would receive in an educational environment;
  2. The intern must benefit from the experience;
  3. The intern does not displace other employees and works under the close supervision of already existing staff;
  4. The employer derives no immediate advantage from the work of the intern;
  5. The intern is not necessarily entitled to a job after the internship; AND
  6. The intern and employer both understand that the intern is not entitled to wages for the hours worked.

An employer must carefully consider all of the facts and circumstances when determining whether interns must be paid.  If all six criteria are not met, then an employment relationship exists between the business and the employee, and, consequently, the employee is entitled to wages for the hours he or she works.  If you find yourself thinking about hiring summer interns or have any questions about how to apply this six part test, please feel free to contact any of the attorneys at Skoler Abbott and Presser.

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