Many businesses like to use interns. There are the altruistic reasons for providing hands-on experience that the intern does not receive in the classroom, and perhaps providing inspiration to them by showing how people work professionally with fellow employees and clients. There is also the obvious perk of having cheap labor and getting an injection of youthful optimism that employees may enjoy.
Some internships are free, while others are paid. Under labor laws enforced by the FLSA, for-profit employers typically need to pay at least minimum wage and overtime pay to workers. Students or interns, however, may be exempt.
The 7 factors for determining an unpaid internship
Courts traditionally use the “primary beneficiary test” to determine the difference between categorizing the worker as an unpaid student intern or a paid employee. The courts consider seven factors for determining a legally unpaid intern:
- There is no promise of pay, implied or expressly said.
- There is training that could also take place in an educational environment.
- The employment is part of their educational training, and the intern receives course credit for their work.
- The internship is tied to an academic calendar and corresponds with academic commitments.
- The internship is limited to a period where the intern receives beneficial learning.
- The intern’s work complements other employees’ work rather than displaces it.
- There is no guarantee of a paid job after the internship.
Circumstances will vary
It is unlikely that all seven measures of the primary beneficiary test will apply, and there is no single definitive factor. Instead, the courts will examine cases individually. Nevertheless, an attorney can help draft a job description that either ensures that the internship is unpaid, or that they are employees under FLSA.