Ah, it’s that time of year again. The season student internship programs at many small businesses. But if you think the term “student internship program” means “free summer worker,” it’s very important that you read on—if you don’t, you are risking a lot of legal hassle down the road.
Use this six-part test to determine if your internship program can be “unpaid”
Unless your internship program meets this six-factor test below from the Department of Labor, you may be breaking state wage laws and the Federal Labor Security Act. Even if your company passes, if you have unpaid interns, make sure to seek guidance from your professional and legal advisors, as laws and regulations can differ by state and local jurisdiction. You should also have clear and thoroughly written descriptions of your internship program, which describes the training offered by the program and clearly discloses that the position is unpaid.
- The training must contain a significant educational component.
- The training must primarily benefit the intern.
- Interns may not displace regular employees but work under the close supervision of existing staff.
- Your company must not derive an immediate advantage from the intern’s activities.
- The intern should not necessarily be entitled to a job at the conclusion of the program.
- There must be a clear understanding that the intern is not entitled to wages.
An unpaid internship must clearly benefit the intern and contain a significant educational component. Unpaid internships are not summer employees you don’t have to pay.