Internships are popular with graduates and school leavers looking for work experience, allowing them to try a variety of different companies and industries to find the right one for them. Employers like internships because they allow an extended period to assess several candidates before offering a job to those most suited. However internships have been in the news more than ever in the past 12 months, as graduates and school leavers fight for jobs and experience and some employers come under fire for offering no remuneration for some of their internship schemes.
These disputes have prompted several court cases, leaving many in confusion as to the employment rights of interns and their entitlement to pay. Employment law recognises different categories of employment status, affording different rights to those within each category. Internships have no official legal employment status, which goes some way to explaining the confusion that surrounds their legal rights. Traditionally the matter of whether interns acquired employment rights, and especially the right to be paid for their time, fell to the individual generosity of the employer and the customary norms in a given industry.
In May , former intern Keri Hudson raised a complaint against her employer, the online review site, My Village. Ms Hudson agreed to participate in a six month unpaid internship, but sued her employer after she found herself working long hours, being given considerable responsibilities and deadlines and even managing other staff. One factor the DOL considers is the extent to which the program accommodates the intern's academic commitments by corresponding to the academic calendar.
Many states have their own wage and hour laws, as well as special exceptions that are applicable to interns and trainees. Some states still follow the old DOL test, others have adopted the new test, and some have completely different criteria.
At the end of the day, multistate employers need to understand the rules in all applicable jurisdictions, Lawless said. When rules differ, employers should follow the stricter requirement, Aragon said, though she noted that sometimes rules are just different from one another, and it can be hard to figure out which one is stricter. Employers may want to seek legal counsel if they aren't sure. Employers should draft an acknowledgment that describes the nature of the work, the educational components and what the intern will gain from the experience, Sobaski said.
Lawless suggested that employers prepare a one- or two-page internship plan. Employers should identify the types of experiences they hope interns will have and meet with interns every two weeks to make sure they are meeting the program's goals.
The DOL's test considers whether the intern clearly understood that there was no expectation of compensation during the program or entitlement to a paid job at the conclusion. So these expectations should also be put in writing and included in the acknowledgment, attorneys said. Courts have described the DOL's primary-beneficiary test as flexible, and no one factor is determinative.
A for-profit business should start with the presumption that interns need to be paid and then build a case using the relevant factors: that the program is for the benefit of the intern, that it is educational and that the business isn't getting an immediate gain from the program, Sobaski said. Note that unpaid internships for public-sector employers and nonprofit charitable organizations are usually permissible if the intern volunteers and doesn't expect to be paid.
If an employer isn't sure whether the internship qualifies under federal, state and local requirements for unpaid internships, it is safest to pay interns the applicable minimum wage, Sobaski said. Litigation can be costly for employers, even if a court ultimately rules that the unpaid internship program was valid. By the time an employer gets the court order saying the program was valid, the business will usually have paid more in attorney fees and lost time for the HR department than it would have by simply paying minimum wage, Aragon said.
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By Lisa Nagele-Piazza, J. Reuse Permissions. Image Caption. The trainees are not necessarily entitled to a job at the conclusion of the training period. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training. McCourt of Greenberg Traurig in Boston. In general:. The internship program must be similar to training that would be given in an educational environment, such as a college, university or trade school.
The intern and the employer must both understand that the intern is not entitled to wages. The company must receive no immediate advantage from the internship and in fact may find its operations disrupted by the training effort.
Despite the risks, unpaid internships appear to be on the rise. In a May survey by Internships. However, more campuses reported lower numbers of paid internships than those reporting increases.
Companies can protect themselves by having the college intern ask his professor for academic credit for the internship. He adds that an intern should not supervise regular employees or other interns, and the company should define the arrangement clearly and in writing, specifying that there is no expectation of a job offer at the conclusion of the internship.
HR professionals and lawyers say it may be useful for companies to keep written records of what an intern expects to gain from an unpaid program. Pay raises in the U. You may be trying to access this site from a secured browser on the server. Please enable scripts and reload this page. By Steve Taylor. Reuse Permissions. Image Caption. Editor's Note: DOL's test for when an intern is an employee has changed.
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