Internship Season is Almost Here
Do You Know the New Wage and Hour Rules?
We all look back on the good old days with a warm heart. Remember when it was commonplace to hire unpaid interns for the summer without worrying about getting sued? Remember when it was possible to have young college students work for your company for FREE all summer and they were happy to do it for the experience? Ah – the good old days – (heavy sigh)!!
In case you haven’t heard, there were a number of wage and hour lawsuits filed by unpaid interns that were decided in the past year or so. Some very big businesses such as: Condé Nast Publications, Warner Music Group, Atlantic Recording, Gawker Media, Fox Entertainment Group, NBC Universal, Viacom, Sony, and Universal Music Group were sued. In these cases, the interns won and were awarded back pay – which for most of them even at minimum wage – was a windfall. It is kind of sad in a way that Conde Nash Publications has decided to end its internship programs as a direct result of the lawsuit against them.
These Decisions Make Sense
If an “internship” is nothing more than a gofer job, then the individuals going fer coffee, lunch, dry cleaning, shopping or anything else that is not related to their career, they should be paid. If the interns are doing work that benefits the company, then they should be paid for this too. So these decisions are correct. These ruling regarding interns are not really new. They have actually been in effect since 1947. They were just ignored until recently.
One other thing to know is the Wage and Hour Division has made it clear that non-profit employers and those in the public sector are exempt from having to pay their interns. So interns are still able to work for free with the government and non-profits.
This does not mean that the unpaid internship is dead. But to qualify, the intern must have a total educational experience. This means that unpaid interns stop making coffee and lunch runs and do not perform mundane tasks such as answering the telephone or filing papers. A few years ago, the Wage and Hour Division issued guidance on unpaid interns, who are also referred to as trainees.
In order to qualify for an unpaid internship, all of the following MUST be met:
- The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
- The training is for the benefit of the trainees;
- The trainees do not displace regular employees, but work under their close observation;
- The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;
- The trainees are not necessarily entitled to a job at the conclusion of the training period; and
- The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.
The wage and hour guidance goes on to say, “In general, the more a training program is centered around a classroom or academy as opposed to the employer’s actual operations, the more likely the activity is training. Also, the more the training is providing the workers (interns) with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the worker is a trainee (and, therefore, qualifies as being an unpaid internship).
On the other hand, if the workers are engaged in the primary operations of the employer and are performing productive work (for example, filing, performing other clerical work, or assisting customers), then the fact that they may be receiving some benefits in the form of a new skill or improved work habits is unlikely to make them trainees given the benefits received by the employer.”
If you intend to use unpaid interns this summer, make sure you know the rules. Make sure you make it a meaningful experience for the interns by designing it in a way that furthers their career ambitions. Do not have your interns do meaningless work. Ensure they come away from their experience with more knowledge of their field and more confidence in their abilities.
It’s a win – win and we all like win-win results.