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We Don’t Have To Pay Our Interns – Do We?

By Noel P. Tripp on April 6, 2010
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For years, students and recent graduates have accepted internships with employers to gain work and practical experience.   Many, if not most, employers have treated and continue to treat these internships as “unpaid.” What’s more, in many industries (including film and advertising) this practice is an institutional rite of passage – part of “dues paying”.  Recent actions and pronouncements by representatives of the federal and various state departments of labor require employers to review their practices to ensure that good intentions (or professional rites of passage) are not leading to wage and hour liability. 

Technically, under the FLSA, there is no such thing as an “intern.”  In general, in order for an employer to avoid any minimum wage obligations an individual must be a “volunteer” or a “trainee”.  Since volunteers generally are not recognized in the for-profit sector, the utility of that classification is limited.   Thus interns, if they are to be unpaid, most likely must be “trainees” for FLSA purposes. In order to determine if an individual is a “trainee” exempt from minimum wage, the following six factors generally must be satisfied. 

1.      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;

2.      The training is for the benefit of the trainees;

3.      The trainees do not displace regular employees, but work under their close observation;

4.      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;

5.      The trainees are not necessarily entitled to a job at the conclusion of the training period; and

6.      The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

The rub is that in many instances the intern is performing productive work that would normally be performed by a paid employee. In such a situation, even if the intern is receiving school credit, minimum wage is due under the FLSA.  In fact, per Nancy J. Leppink, the acting director of the USDOL’s Wage and Hour Division: ““If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law.”   It is also vital for those with internship programs to note that M. Patricia Smith, the Solicitor of Labor responsible for coordinating the Wage and Hour Division, initiated investigations against several businesses for their use of interns during her tenure as New York Commissioner of Labor.

As always, state law also must be considered.  While many states track the FLSA standard, there are various differentiations particularly relevant to multi-state employers.   For example, in New York, if an individual is receiving school credit, the individual generally is exempt from minimum wage payment obligations under state law.

What is the takeaway?  Businesses need to analyze exactly what the intern will do during the internship.  If the intern’s time will be spent primarily on productive work that would normally be performed by another employee, the business should consider paying the intern minimum wage to avoid any trailing legal issues.

 

Photo of Noel P. Tripp Noel P. Tripp

Noel Tripp is a Principal in the Long Island office of Jackson Lewis P.C., one of the largest law firms in the United States devoted exclusively to representing management in labor and employment matters. Since joining Jackson Lewis P.C. as a summer associate…

Noel Tripp is a Principal in the Long Island office of Jackson Lewis P.C., one of the largest law firms in the United States devoted exclusively to representing management in labor and employment matters. Since joining Jackson Lewis P.C. as a summer associate in May 2005, he has practiced exclusively in employment law and has been involved in matters pending before federal and state courts and administrative agencies covering the gamut of employment-related matters from discrimination and workplace harassment to wage/hour disputes and affirmative-action compliance. His principle focus is the defense of class and collective action lawsuits under federal and state wage-and-hour laws.

Mr. Tripp is a graduate of Dartmouth College (A.B. 1999), and Fordham Law School (J.D. 2006). Prior to attending law school, Mr. Tripp was a complex commercial litigation paralegal at a large national law firm in Los Angeles, California. He is admitted to practice in the state of New York.

Education

  • Fordham University, J.D., 2006
  • Dartmouth College, A.B., 1999

Admitted to Practice

  • New York, 2007
  • New York – E.D. N.Y., 2008
  • New York – S.D. N.Y., 2008
Read more about Noel P. TrippEmail
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  • Posted in:
    Employment & Labor
  • Blog:
    Wage & Hour Law Update
  • Organization:
    Jackson Lewis P.C.

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