 Legal Best Practices
Magazine
ENSURE YOUR INTERNSHIP PROGRAM COMPLIES WITH FEDERAL
REGULATIONS TO AVOID REAL - WORLD HEADACHES
By Wendy Smith,
Fisher & Phillips LLP – Tampa office
Published: April / May 2008
While internships offer students unparalleled
opportunities to gain valuable real-world work
experience and hands-on career development, internship
programs can create real-world problems under the Fair
Labor Standards Act (FLSA) for employers. In order to
make the most of an internship program, employers should
be aware of the laws and make efforts to ensure
compliance with the criteria outlined by the FLSA.
The FLSA does not define “intern,” but Department of
Labor (DOL) regulations and Opinion Letters contain a
significant amount of discussion regarding interns. The
FLSA does acknowledge that not all persons who perform
duties for an employer, such as independent contractors
and trainees, are employees and thus entitled to
compensation in accordance with wage and hour laws. Each
of these special groups is specifically defined under
wage and hour laws, but determining whether a worker
falls within one of these definitions can nonetheless be
confusing.
The most likely way an intern may be a non-employee and
thus exempt from wage and hour requirements is if that
person meets the six-factor test outlined by the DOL for
“trainee” status. According to the DOL, each of the
following six criteria must be met:
1. the training is similar to that which would be given
in a vocational school
2. the training is for the benefit of the trainees
3. the trainees do not displace regular employees, but
work under close observation
4. the employer derives no immediate advantage from the
activities of the trainees, and on occasion his
operations may actually be impeded
5. the trainees are not necessarily entitled to a job at
the completion of the training period
6. the employer and the trainees understand that the
trainees are not entitled to wages for the time spent in
training (but may receive a nominal stipend or tuition
assistance to cover costs such as meals and lodging).
Factors three, five and six are fairly straightforward
and are usually easy for the employer to determine.
However, determining the remaining three criteria often
requires careful analysis and there may not be a black
and white answer. While the courts also use these same
criteria to analyze a worker’s status, they do not
necessarily agree with the DOL that all six factors must
be met for someone to be deemed a trainee. Courts
commonly find that the most important determinant is who
primarily benefits from the arrangement. If the employer
is the primary beneficiary, the individuals will be
considered employees, but if the interns primarily
benefit from the work experience, they will be
considered trainees.
It is important to ensure that the interns receive the
primary benefit from the experience. Internships should
emphasize exposing students to the career field and
providing valuable mentorship opportunities, not
production. For brief internships, this may not be a
problem, as the person will often not learn how to
perform more than a trivial amount of productive work.
For longer internships, employers should keep in mind
that an individual can start out as a trainee/intern,
but become an employee later. One court determined that
although interns were legitimately trainees in the
beginning, as they gained experience and began to
perform a greater volume of meaningful work benefiting
the employer, they became employees.
For employers with interns who do not meet the trainee
requirements and are therefore most likely employees,
the next issue is FLSA compliance. The first
determination is whether the worker is exempt or
nonexempt. Practically speaking, in the vast majority of
cases, interns will not be exempt, either because they
do not meet the “duties” test for any of the White
Collar Exemptions, or because they are paid less than
the statutory minimum salary of at least $455.00 per
week, or both.
Assuming interns are nonexempt, they must be paid at
least the current Florida minimum wage of $6.79 per hour
and receive overtime if working more than forty hours in
a workweek. Obviously, to ensure interns are paid
correctly, time records must be maintained. To avoid the
possibility of FLSA violations, employers should ensure
their nonexempt employee interns accurately capture
their time and are paid for all hours of work.
Internships allow students to mesh real work experience
with a learning experience in a way that is often not
attainable in the classroom. Unfortunately, providing
interns that real world experience may create real
issues for the employer under the FLSA and other
employment laws. In order to make the most of an
internship program for all involved, employers should be
aware of the laws and ensure they are in compliance.
Wendy Smith is Of Counsel
in the Tampa office of Fisher & Phillips LLP, one of the
largest national law firms in the field of labor and
employment law, with 190 attorneys in 18 offices. One of
the Firm’s true generalists, her practice areas include
wage and hour law, the Family and Medical Leave Act, and
the Americans With Disabilities Act. She spends much of
her time counseling employers in day-to-day employment
and labor matters and assisting employers in finding
practical solutions to workplace problems.
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