According to the United States Department of Labor, interns – traditionally unpaid students or volunteers – may be entitled to receive minimum wage and overtime under the Fair Labor Standards Act for the services they provide to “for-profit” private sector employers.
The Fair Labor Standards Act (FLSA) defines the term “employ” broadly. If a covered and non-exempt (hourly) worker is “suffered or permitted” to work, that person must be compensated for the services they perform for an employer. Internships in the “for-profit” private sector will most often be viewed as employment, unless the employer can satisfy a multi-part test.
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The Test For Unpaid Interns
Sometimes persons who participate in “for-profit” private sector internships or training programs may do so without receiving compensation. The Supreme Court has held that the term “suffer or permit to work” does not include activities a person does for his or her own interest, as opposed to the interests of the potential employer. In order to figure out if the intern has to be paid, the employer needs to look at the following six criteria and make sure that each is satisfied.
1. The internship is similar to training which would be given in an educational environment, even if it includes actual operations of the employer;
2. The internship experience is for the benefit of the intern, such as receiving school credit;
3. The intern does not displace regular employees and is closely supervised by existing staff;
4. The employer does not receive an advantage from the intern’s activities, and may actually be disadvantaged because its operations 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 in the internship.
If each of these factors is shown, then an employment relationship does not exist under the FLSA, and the employer need not pay wages or overtime. However, if some but not all of these criteria are met, then the intern is more likely an employee who is entitled to be paid for his or her services.
If you need more information on this subject, check out the Department of Labor’s Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act .
