Last month, Parker Poe's EmployNews reported on growing concern among employers over the applicability of minimum wage and overtime payment laws to unpaid internship programs. Such programs have grown as older workers looking to make a career change accept unpaid positions in order to build experience in new areas. While complaints over unpaid internships are unusual, DOL appeared to be taking an increased interest in enforcing wage payment laws applicable to some of these programs.
In late April, DOL's Wage and Hour Division issued a Fact Sheet explaining when for-profit employers must pay interns. The Fact Sheet lists six factors, all of which must be met in order for minimum wage and overtime requirements not to apply:
1. The internship must be similar to training given in an educational environment.
2. The internship must be for the benefit of the intern.
3. The intern cannot displace regular employees.
4. The employer must not obtain any immediate advantage from the intern's work.
5. The intern is not entitled to a job at the end of the internship.
6. The employer and the intern understand that the internship is unpaid.
In general, DOL states that an unpaid internship should be structured around a classroom or academic experience as opposed to the intern working in the employer's actual business operations. The intern cannot perform the routine work of the business on a regular or repeated basis.
This view of unpaid internship requirements contrasts with many internship programs which are designed to determine the interns' capabilities by having them participate in the business' operations. In these situations, the employer should consider paying the intern at least minimum wage, and if applicable, overtime for weekly hours worked in excess of 40.
The Fact Sheet can be found at www.dol.gov/whd/regs/compliance/whdfs71.htm.