Compensation – Unpaid Interns Can Be Expensive
“Summertime, and the livin’ is easy…” Unless, of course, that summer intern you hired decides to sue you because she thinks she should have been paid for her work. And that can cost a lot more than $7.25 an hour…
Want to avoid a lawsuit over your internship? Follow these five recommendations:
1. Get it in writing:
“Enter into a written agreement with the intern specifying the parameters of the internship, confirming that the internship is unpaid, and documenting any educational experience and educational credits the intern will earn for participating in the internship.” (Foley & Lardner)
2. Remember the basics:
“All ‘employees’ of a business must be paid at least minimum wage unless they are a ‘trainee’ under the law, regardless of whether they are called an ‘intern.’ So, what makes a trainee? The United States Department of Labor has established a six-factor test couched in terms of – you guessed it – training – to determine whether an unpaid intern should be considered an employee or trainee under the Fair Labor Standards Act.” (Looper Reed)
3. Ask the right questions:
“Whether an unpaid internship would occur under the auspices of an educational institution or otherwise, ask yourself this: If there is a later FLSA claim, will the circumstances clearly, provably, and readily show (i) that the relationship was for the purpose of providing education, instruction, and training that imparted significant, substantive, transferrable knowledge of a broadly-applicable kind; and (ii) that what actually occurred was consistent with and carried out this purpose?” (Fisher & Phillips)
4. Don’t forget about state laws:
To finish the article and get the remaining tips, Click JD Supra Law News>>
- Internships: Out of Fashion – Ervin Cohen & Jessup LLP
- Are Unpaid Interns Handy Helpers or a Source of Liability? – Foley & Lardner LLP
- Unpaid Interns, Volunteers, And Trainees – Looper Reed & McGraw, P.C.
- Risks Of ”Internship” Claims And Liability Still Increasing – Fisher & Phillips LLP
- “Paying Interns May Not Be Enough to Stave Off Wage and Hour Claims” in Take 5 Newsletter – Epstein Becker & Green, P.C.
- Employers Need To Be Careful When Classifying Individuals As Unpaid Interns – Poyner Spruill LLP
by Lance Godard
Opinions expressed in this article are those of the author and not of The HR Gazette or its team members.