Internships have become a major focus in educational development plans and in many cases, have become a necessary requirement to graduate from college.
Both students and employers benefit from the experience internships provide. By gaining valuable real world work experience, developing professional interpersonal skills and being exposed to different career opportunities, employers often find individuals with internship experience an attractive hiring choice.
Because internships are so important to the development of a quality workforce, it is imperative that businesses and for-profit organizations know that the rules of unpaid internships are changing.
The Department of Labor recently issued guidelines promoting an aggressive stance against unpaid internships. In the past year, unemployment among workers ages 20 to 24 has raised to 16 percent. In many cases, the best alternative to unemployment is an unpaid internship. For-profit employers who utilize talent from this pool of individuals need to be careful not to break the law. Non-profit are not under the same restrictions as for-profit employers.
The U.S. Department of Labor Wage and Hour Division has developed a six point test for evaluation whether an individual constitutes a “trainee” (intern) for the purposes of the Fair Labor Standards Act.
All six factors must be met before an employer can legally not pay an intern:
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 (rather than the employer);
3. The trainees do not displace regular employees, but work under their close observation;
4. The employer that provides the training delivers no immediate advantage from the activities of the trainees, and on occasion the employers 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 training.
Employers that provide unpaid internships should pay careful attention to this issue. It is recommended to formalize your internship relationship with an agreement that outlines how each of the six factors will be addressed and met. Local colleges with internship programs will be able to help you navigate the process.
Visit the Chamber’s Advocacy Center for more information like this and other policy issues impacting business.
