Question: We have
a new intern – the daughter of one of the owners. It’s an unpaid internship, but I thought
those were illegal. Should we be paying
her for the work she performs?
answer is most likely yes. In recent
years, the Department of Labor has issued clarifying guidance on what qualifies
as a bona fide internship. For a review
of that guidance, read the following: https://www.dol.gov/whd/regs/compliance/whdfs71.htm.
Essentially, unpaid internships have to benefit the intern,
not the employer. To be bona fide,
courts have identified the following seven factors as a test:
extent to which the intern and the employer clearly understand that there is no
expectation of compensation. Any promise of compensation, expressed or implied,
suggests that the intern is an employee—and vice versa.
extent to which the internship provides training that would be similar to that
which would be given in an educational environment, including the clinical and
other hands-on training provided by educational institutions.
extent to which the internship is tied to the intern’s formal education program
by integrated coursework or the receipt of academic credit.
extent to which the internship accommodates the intern’s academic commitments
by corresponding to the academic calendar.
extent to which the internship’s duration is limited to the period in which the
internship provides the intern with beneficial learning.
extent to which the intern’s work complements, rather than displaces, the work
of paid employees while providing significant educational benefits to the
extent to which the intern and the employer understand that the internship is conducted
without entitlement to a paid job at the conclusion of the internship.
If your internship cannot pass the test above, your intern
is most likely entitled to both minimum wage and overtime pay under the Fair
Labor Standards Act.