The Fair Labor Standards Act and Unpaid Internships

November 11, 2010, 3:49 PM

When faced with the unfortunate realities of high unemployment rates and limited job openings, job seekers (and students in particular) are eager to take advantage of any opportunities that may come their way including the unpaid internship. While the thought of free labor from a well-educated, enthusiastic student certainly sounds enticing, employers must be cognizant of the laws affecting unpaid internships.

The Department of Labor explains that more often than not interns working in the for profit private sector will be subject to the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA). The provisions will only be avoided if the internship meets all of the following criteria:

(i) the internship is similar to training which would be given in an educational environment; (ii) the internship is for the benefit of the intern; (iii) the intern does not displace regular workers, but works under their close supervision; (iv)the employer derives no immediate advantage from the interns activities and may actually be impeded at times; (v) the intern is not necessarily entitled to a job at the end of the internship; and (vi) both the employer and the intern understand that the intern is not entitled to wages.

With the recent increase in FLSA-related lawsuits, employers who are considering or have already implemented an unpaid internship program, should carefully analyze the program to ensure compliance with the applicable wage laws. --Mark E. Warmbier