The role of the intern is not what it used to be. Internships these days require more than making a Starbucks run or picking up the boss’ dry cleaning.
Establishing an internship program is a great way for your company to build a pipeline of talent. However, things are not what they used to be. There are several considerations when creating your internship program.
Under the Fair Labor Standards Act (FLSA), most interns are considered employees subject to the FLSA’s minimum wage and overtime requirements. However, if an intern is not an employee within the meaning of the FLSA, then the FLSA’s minimum wage and overtime requirements do not apply. The Department of Labor uses a Six-Factor Test for Unpaid Interns.
The DOL’s Six-Factor Test for Unpaid Interns
Under the DOL’s test, an employment relationship does not exist under the FLSA if all the following factors are met:
- The internship must be like training that would be given in an educational environment;
- The internship must be for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer derives no immediate advantage from the intern, and on occasion, its operations may be impeded;
- The intern is not necessarily entitled to a job at the end of the internship; and
- The employer and intern understand that the intern is not entitled to wages for the time spent in the internship.
If you’re considering an internship program, consult with legal counsel to ensure compliance with all applicable laws and regulations.
When in doubt, it’s best to classify interns as employees and pay them as required under applicable federal, state, and local law. These days, it pays to be cautious.
If you’re a Miami Payroll Center client, we can provide guidance and best practices with respect to internships. Contact our HR Team at (305) 273-4066.