Question: A few local college kids home on spring break approached my boss asking for unpaid summer internships so they could get work experience on their résumés. My boss thinks it’s a great idea because we have no budget for additional staff but lots of work they could do. Is it okay to put these students to work but not pay them over the summer?
Answer: While it may look like the perfect solution for both the students and your company, there are potential risks with providing unpaid internships unless the internship meets the fairly strict training requirements outlined by the federal Fair Labor Standards Act (FLSA). The FLSA “six-factor test” criteria outlined below can help you determine whether the work you would provide meets the “learner/trainee” rules:
The training must be comparable to that given at a vocational school (for example, the intern could pay to receive the training somewhere else).
The training must benefit the student.
The student would not replace a regular employee (the intern cannot fill in for someone on a short-term disability or out for the day).
The employer does not immediately benefit from the student’s activities. (This requirement is especially troublesome for employers because the company does expect to receive a benefit from the intern’s labors. Practically, this means the intern cannot deliver mail, sort files, file papers, organize a person’s calendar, conduct market research, write reports, schedule interviews, or do any other job that assists the employer in any way in running their business).
There is no promise of a job following the training.
Both the employer and the student understand that no wages will be given for the training period.
In your case, having these students help clear out the backlog of additional work that normally would be done by a regular employee for the benefit of the company may not meet the FLSA requirements for unpaid work/training. Our best advice is that if there is any doubt, pay the students at least the minimum wage. Recently there has been an increase in the number of lawsuits filed by unpaid interns claiming back wages and possible overtime under both the federal FLSA and state laws. The general rule is that if the work you are providing is primarily job training that gives the interns professional experience that furthers their educational goals, then they may not be considered an employee entitled to compensation. However, if they are doing work usually done by employees and are not receiving training and close mentoring, they should be paid wages.
The Department of Labor fact sheet regarding student interns provides more detailed information. In addition to the federal rules, states may have additional conditions that employers must satisfy. Failure to offer training meeting these mandates for unpaid status could lead to employer penalties, including back wages and possible overtime pay to both present and former interns.
