Many small business owners would like to hire an unpaid intern. However, it’s vital they follow federal guidelines.
Federal law, the Fair Labor Standards Act (FLSA), as well as Florida state law, requires employers to pay a wage to their “employees.” Therefore, an intern — if unpaid — cannot be considered an “employee” under the FLSA; rather, she must be what the FLSA calls a “trainee.”
The Wage and Hour Division of the United States Department of Labor developed six factors that all must be met to categorize a worker as a bona fide “trainee.” If you are considering hiring an unpaid intern, all six factors must apply. Otherwise, your intern may not be classified as a “trainee” — and may be due a wage from you under the FLSA. The factors are:
1. The training, even though it includes actual operation of the facilities of the employer, must be similar to what would be given in a vocational school or academic educational instruction. It is helpful if the intern is learning skills she can use in other companies – not just yours. Also, using something that might simulate a classroom environment, at least part of the time, helps this factor.
2. The training must be for the benefit of the intern. If the intern is doing a lot of general office stuff, like filing and assisting customers, even though she may be improving her filing skills, if the tasks she is doing benefit you more than her, this factor may not be satisfied.
3. The intern must not displace regular employees, but work under their close observation. If you substitute the work of your regular employees’ with an intern’s work, or supervise your intern at the same level as your regular employees, she is more likely to be classified as an “employee” than a “trainee” under the FLSA. Think: Would your intern’s position cause you to not hire a potential employee or reduce one of your paid employees’ hours because you already have someone (an intern) performing the work? If so, your intern may be due wages. On the other hand, it is more likely your intern is a “trainee” in situations where she, under close and constant supervision, “shadows” an actual employee and can learn while performing little to no work.
4. The employer must derive no immediate advantage from the intern’s activities, and on occasion the employer’s operations may actually be impeded. This factor is similar to the second and tends to hammer in something employers must realize before hiring an intern: Teaching an intern takes time and energy; it’s about teaching, not slave labor.
5. The intern must not be necessarily entitled to a job at the conclusion of the training period. Generally, the intern will go into the situation with the understanding that she is not entitled to a job at the end of her internship. This factor is not an outright ban on hiring workers who complete their internship, but it does frown upon internships that function more as a “trial periods.” However, where an employer tends to hire nearly all workers upon the completion of internships, this factor may not be satisifed.
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in training. This factor is something the employer can easily, and should, put in writing.
If you have legal questions involving an internship situation, feel free to contact our office.