This fact sheet provides general information on whether interns and students working for “for-profit” employers are eligible for minimum wage and overtime pay under the Fair Labour Standards Act (FLSA).1 Internships are often seen as a simple “win-win” situation. The intern gains invaluable knowledge and experience in building their resume, and the company gets the extra help. While this type of relationship has many advantages, legal problems arise when these internships are unpaid. In short, unpaid internships create a vicious cycle: they reward students who are already economically advantaged while increasing competition for everyone else. Even unpaid legal internships follow a fine line of compliance, where failure is expensive. While some large companies may play the system by factoring legal fees into labor costs – paying an out-of-court settlement to an intern is always cheaper than paying 25 intern salaries – small companies don`t have such a luxury. Ideally, interns should perform low-risk tasks for your business that relate directly to their field of study. For example, a writing intern may research and prescribe work that will be done by a professional. An engineering intern may perform field work (with supervision). The work that interns do for your company must match the position. “The quality of work is always superior when you pay someone, even a nominal amount,” Knight said. “If the intern doesn`t earn more than twice the minimum wage, do you even want them there?” In fact, as the New York State Department of Labor has described, “in most cases, interns will require employers to provide resources that may affect site productivity for a period of time,” making it virtually impossible for a company to benefit from an unpaid internship. Again, both parties need to understand the nature of the relationship.
Before the internship begins, it must be clear that this is an unpaid position. Kristi Porter, the Georgia-based solopreneur behind text consultancy Signify, also found her unpaid internship program to be an overall positive experience. Unpaid legal internships are rarely profitable, and profitable unpaid internships are rarely legal. Meanwhile, the rare cases in the middle of the Venn diagram can still create moral difficulties: while you may not have to pay a salary, there are costs elsewhere. Under the Fair Labour Standards Act of 1938, every employee of a for-profit business must be paid for their work. However, interns are not considered employees within the meaning of the RSA. Recently, magazine publisher Condé Nast faced a class action lawsuit against interns who claimed their experience did not meet FLSA`s requirements for unpaid internships because their work benefited the publisher and offered no educational value. The lawsuit was eventually settled for $5.8 million. “I only need five hours a week, so it`s not paid,” Porter said.
“Everyone was good with our arrangement and I think had a great time and learned a lot. As a one-man business, it`s also great to sometimes get other people`s opinions and ideas. Whether you`re considering an unpaid internship in California or you`re already an unpaid intern, it`s important to know what your employer`s obligations are if you accept your job without paying for it. Our California employment lawyers have decades of experience that we leverage to evaluate your case, including representing employers for several years. Now that we represent employees, we know what your employer will say to limit liability and counter these claims. Call an employment lawyer from Kesluk, Silverstein, Jacob & Morrison, P.C. to discuss your unpaid articling in California. Employers in California must follow two standards when it comes to internships: federal and state.
At the federal level, the Department of Labor has created unpaid labor laws that all states must obey. The Ministry of Labour sets out seven requirements to determine the legality of an internship. The employer must ensure that: “It`s generally cheaper in the long run to ensure that each internship complies with the law before hiring an intern,” Ruiz said. It`s hard to see harm in an unpaid internship – they can eventually leave. However, according to the Economic Policy Institute, unpaid internships can have a major disadvantage for social mobility. Your report shows that the unpaid intern is not the only intern; Students who cannot afford to work for free are also affected. For these students, the price of an unpaid internship is not just the time, but the opportunity cost of the salary they might earn in another part-time or full-time job. After graduation, when these students are outdone by those who had the support for an unpaid internship, their disadvantage becomes even greater. Brandon Ruiz, whose Los Angeles law firm Hennig, Ruiz & Singh represents workers in wage disputes, reminds employers that labels mean nothing. “If the intern is doing work that benefits the employer and would otherwise be done by a regular employee, it is unlikely to be an internship. If the intern is performing work that primarily benefits the intern and is not performing work that would otherwise be performed by an employee, it is more likely to be an internship. While internship agreements can be a good start to a promising career, some employers treat interns as free labor and don`t consider the intern`s legal rights.
Comments are closed.