Successful and Legal Internship Programs
In 2013, a federal district court ruled that the producers of the "Black Swan" movie violated federal wage and hour laws when they used two unpaid interns on the set as “gophers” instead of giving them actual industry experience. Similar suits have followed, and with summer quickly approaching, we want to prevent this from happening to your company.
If you are like many businesses, you have considered adding internship programs this summer. This method of on-the-job training is a popular choice for businesses and young workers alike. However, the recent media attention and legal environment makes the decision between paid vs. unpaid internships much more critical. We can help set up a successful internship program that's right for your company.
Paid vs. Unpaid Internships: Defined by the Department of Labor
The issue of paid vs. unpaid internships is a hot topic among underemployed college-age workers, but many companies are unintentionally non-compliant with complex Department of Labor regulations. For this reason and based on recent rulings, this is an appealing opportunity for trial lawyers. Don't end up the victim of lawsuits like this. If you offer, or want to offer, internship programs, we outlined the Department of Labor rules to help you successfully incorporate internship programs into your business, remain compliant, and avoid unnecessary lawsuits.
Six Rules for Unpaid Internships at For-Profit Companies
1. The internship provides training similar to an "educational environment". (Read further for an explanation of what an "educational environment" means for you.)
2. The intern benefits from the internship experience.
3. The intern does not displace regular employees and works under supervision of existing staff.
4. The employer gets no immediate advantage from the intern's work and sometimes its operations may be impaired.
5. The end of an internship does not entitle the intern to a job.
6. Both employer and intern understand the time spent in the internship does not entitle the intern to wages.
What does "Educational Environment" Mean?
Unpaid internships: An educational environment does not mean a classroom environment. It refers to the basic academic experience of transferring knowledge. The internship must give the intern skills used in multiple employment settings, as opposed to skills specific to one employer.
Paid internships: If the intern performs productive work such as filing, clerical work, or helping customers, from the law's perspective, the company benefits, which means you need to pay the intern.
Displacement of Other Workers and Supervision
Unpaid internships: You provide an intern with job shadowing opportunities under the close and constant supervision of your regular employees and the intern performs little or no work.
Paid internships: Substituting the intern for regular workers, or giving them the same supervision as your regular workforce, means that the intern needs to be paid.
Expectations of Future Employment
You cannot use unpaid internships as a trial period for workers seeking employment. The internship needs to be for a fixed period of time and both parties must understand that no expectation of either pay or a permanent job exists.
Let Us Help
Internships can be a great experience for both the intern and your company. Call on our expertise
to help you structure your internship program correctly.