on September 09, 2016 Human Capital Management

What Are the Requirements for Unpaid Internships?

Common customer question #15: What requirements do I have to meet to hire unpaid interns? When you sign up, the director of their program will send you more information about where to meet and what you can expect.The Department of Labor (DOL) uses the six factors below to evaluate whether a worker is an intern or an employee for purposes of the Fair Labor Standards Act (FLSA). These six criteria must be applied when making this determination:

An unpaid intern asleep at workCourtesy of Richard Elzey on Flickr via CC

The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;

  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The intern is not necessarily entitled to a job at the conclusion of the internship;
  • 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
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
     If all these conditions are met, a company may be able to classify the worker as an unpaid intern. Keep in mind, however, that this is a very high bar to meet. More often than not, the work done by an intern benefits the employer. Consequently, it’s often safest to simply pay minimum wage and overtime (if applicable) to interns.

Paul Hardin

Paul Hardin is President of Moulton & Hardin, Inc. As an expert in both Employee Benefits and Workforce Management, Paul studies the relationship between all aspects of Human Capital Management, with an emphasis on Benefits Management, ACA, and how an HCM platform is invaluable for employers.

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