HCW Benefits Blog

This is a guest blog post from our HR partner CAI.  CAI helps companies maximize employee engagement and minimize employer liability through human resources and management advice, training, news, survey data, public policy advocacy and consulting services.

With the U.S. Department of Labor’s (USDOL) Wage and Hour Division focusing so closely on uncovering and investigating violations of the Fair Labor Standards Act (FLSA), employers need to be sure that they are complying with every part of the wage and hour law.  One area where the actual regulations often don’t match what employers believe them to be concerns the paying of interns.

Thankfully, USDOL released Fact Sheet #71: Internship Programs under the Fair Labor Standards Act last year, which provides general information to employers to help determine whether interns must be paid under the FLSA for the service they provide.  For an internship to be unpaid it must meet the following six criteria:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an education environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. 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;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Along with the six criteria, USDOL also provides some examples and interpretations of workplace situations in the Fact Sheet.

We encourage employers who have an internship program in place, or who are considering one, to review this important Fact Sheet.  A review of the six criteria and the interpretations in this Fact Sheet should help clarify any confusion.  Interns who do not meet the criteria should be paid at least minimum wage, plus any earned overtime.

If you have any questions about intern compensation, please contact a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.