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FLSA Question: When Do Unpaid “Interns” Become Unpaid “Employees?”

| Jan 8, 2013 | minimum wage violation |

As we move into to the end of 2013, our employment law attorneys cannot help but look back on a year filled with news stories about unpaid interns suing their “employers” for wages and overtime hours spent trying to get their collective foots into various employment fields and/or large corporations. The most prominent class action lawsuits in the news include defendants such as the Hearst Corporation, Fox Searchlight, and the PBS talk show “The Charlie Rose Show,” and they have challenged the long accepted tradition of voluntarily undertaking unpaid positions with the hope of turning your uncompensated work into business connections and/or possible employment.  At one point or another, most people have either worked an unpaid internship or know someone who has, but most people do not know when such “unpaid interns” are actually considered “unpaid employees” under the law. Of course, the major implication of this distinction is that employees are entitled to compensation in accordance with the Fair Labor Standards Act (“FLSA”).

The FLSA generally requires employers to pay their employees at least minimum wage for all hours worked, as well as overtime for all hours worked over 40 in a week. Internships and training programs are excluded from this requirement only in limited circumstances. Because the FLSA prohibits employees from waiving their rights under the law even if they want to, it is only under those limited circumstances that interns may work without compensation.

The Department of Labor (“DOL”) created a six-part test that must be applied when determining whether an internship or training program meets the FLSA exclusion. Under the test, each of the following criteria must be met:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship;
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship;

When — and only when — all of the above criteria are met, an employment relationship does not exist under the FLSA and the internship may be unpaid. But, if any of the above criteria are not met, than an employment situation is established which necessitates the FLSA compensation restrictions referenced above.  Note that even if a student receives academic credit for his or her participation in the internship, as long as the internship is unpaid, the above six factors still need to be met.

If you even think that your employment rights have been violated or that you might need an employment lawyer, then call the right attorney to schedule a free and confidential consultation at (216) 271-3742. The Spitz Law Firm is dedicated to protecting employees’ rights and solving employment disputes.

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