Adult Internships - Unpaid Work for Out-of-Work Grownups ?

By Sheri D. McWhorter

Many highly qualified mid-career professionals presently find themselves out of a job and looking for work. Some job search / career advice blogs promote adult internships as “the perfect way to relaunch a career or reinvent one if you’re in your 30’s, 40’s, or older.” A quick search of the job boards at Monster.com, CareerBuilder or even Craig’s List will likely yield multiple internship opportunities. Given the realities of today’s business climate, many internships are unpaid.

From the point of view of the out-of-work professional, an internship provides the opportunity to learn new skills and possibly get a foot in the door of his next career move. An internship can allow the worker to show his stuff, and get some additional or different experience, as well as get a leg up on the competition. An internship can fill a gap on a resume and help keep the person busy while searching for that next job or new career. At a minimum, it beats sitting at home waiting for the phone to ring.

Seeking to reinvent their careers, jobless professionals often approach business owners, convinced that if they had the specific experience that business can provide, they would be able to find work in their new field. The adult intern-to-be offers a compelling argument: Allow me to volunteer with your business. I will work for free, in exchange for gaining these skills for my resume. Amidst downsizing and layoffs, some private employers see unpaid “interns” as a way to add staff while cutting costs. Companies are enthusiastic to bring on extra help – especially for free. Sounds like a good deal, but beware. The Fair Labor Standards Act (“FLSA”) generally prohibits unpaid internships / volunteering in the private, for-profit business world.

The U.S. Department of Labor (USDOL) takes the position that most internships are really employment arrangements, requiring compensation. According to Nancy J. Leppink, USDOL Deputy Wage and Hour Administrator, “If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an [unpaid] internship and be in compliance with the law.”

The USDOL has published the criteria the agency will apply to determine whether or not an internship is legit. First and foremost, an internship cannot replace what (in better economic times) would ordinarily be a paid position. Training provided must be for the benefit of the intern, largely a benevolent contribution to the intern. The employer must derive no immediate economic advantage from the intern’s activities, and those activities cannot be used to generate revenue for the business. Used properly, at times the employer’s operations may actually be impeded by the presence of the intern, and the training and supervision required.

Many “volunteer” or “unpaid internship” gigs remain under the radar, since there is often little incentive for either the employer or the intern to blow the whistle on the internship arrangement. More and more college graduate and middle-aged professionals are willing to work for free in hopes it will land them a paying job. Many internships serve as valuable stepping stones to future jobs, providing interns with valuable experience and connections. Displaced workers want the job experience and connections, and accept unpaid “internships” as try-outs for employment. Employers want the free labor. But beware. The stakes are high and the risks are great. Unpaid internships that do not meet all of the USDOL criteria are legal landmines for employers. Misclassification can result in significant legal problems for the company, including issues related to unpaid overtime and liability for employee benefits, employment taxes, and unemployment insurance coverage, not to mention potentially hefty legal fines and legal defense costs that could cripple the business.

Many states, including Florida, are aggressively pursuing unpaid employment taxes and unemployment compensation assessments. Some states, including California, New York and Oregon, have launched probes into whether private employers are using unpaid interns to circumvent minimum wage and overtime laws, while New York’s labor commissioner, M. Patricia Smith ordered investigations into internships at several prominent NY firms. As President Obama’s new Solicitor of the Labor, Ms. Smith is now the top law enforcement official at the USDOL, and has voiced her commitment to stepping up enforcement nationwide.

Employers considering offering unpaid internships should carefully examine the USDOL criteria beforehand. Unpaid internships have long been a way of life for students, who receive academic credit instead of a paycheck. However, special scrutiny applies to any unpaid internship not affiliated with an educational institution whereby the intern receives academic credit associated with the internship. Where there is doubt as to whether the internship meets all of the USDOL criteria, employers should seriously consider offering the internship at minimum wage rather than without pay. By hiring selectively and paying minimum wage, businesses will benefit from internships by skilled, experienced professionals – temporarily out of work due to the down economy - at bargain prices, and without the significant risk and exposure of potential state and federal wage and hour violations.

The health care reform legislation, passed March 23, 2010, amended federal wage and hour law, specifically, the Fair Labor Standards Act (”FLSA”), and effective immediately, requires that employers provide unpaid break time for nursing mothers to express their breast milk.  On July 15, 2010, the U.S. Department of Labor issued guidance for employers on the mandatory break time and the specific requirements of the FLSA amendment.

Under the new requirements, employers must provide a reasonable amount of break time for a non-exempt employee to express breast milk for her nursing child for up to one (1) year after the birth of the child.  The employee must be allowed a break each time the employee needs to express the milk, as frequently as needed.  The legislation recognizes that the frequency of the breaks, as well as the duration of each break, will likely vary, according to the needs of the nursing mother. 

Employers must provide the nursing employee with a private place to express the milk – and that place cannot be a bathroom.  The place provided must be “shielded from view and free from intrusion from coworkers and the public.”  A bathroom, even if private, is not a permissible location.  The location provided must be functional as a space for expressing breast milk.  If the space is not dedicated to the nursing mother’s use, it must be available when needed.  A space temporarily created or converted into a space for expressing milk or made available when needed by the nursing mother is sufficient provided that the space is shielded from view, and free from any intrusion from co-workers and the public.

Employers are not required under the FLSA to pay the nursing mothers for breaks taken for the purpose of expressing milk.  However, where employers already provide paid breaks, an employee who uses that break time to express milk must be compensated in the same way that other employees are compensated for break time.  Also, remember that breaks of 20 minutes or less for non-exempt employees must be paid.  At present, the new regulations on unpaid breaks for nursing mothers appear in possible conflict with this provision of the FLSA, at least to the extent the nursing mother takes a break of less than 20 minutes to express her milk.  To date, no guidance or clarification has been issued by the DOL on this potential conflict.

In addition, the FLSA’s general requirement that the employee must be completely relieved from duty will continue to apply.  Where the nursing mother is not completely relieved of duty during the break time, the employee must be paid. 

Only employees who are not exempt from the FLSA’s overtime pay requirements are entitled to breaks to express milk.  Although the legislation does not require the break time be allowed for exempt employees, recall that where an exempt employee does take a break, an employer may not reduce the salary of the exempt employee for the time spent on the otherwise “unpaid” break, because such a reduction would be inconsistent with and could jeopardize the employee’s exempt status.

Employers with fewer than 50 employees are not subject to the FLSA break time requirement if compliance would impose an undue hardship.  “Undue hardship” is determined by looking at the difficulty or expense of compliance for a specific employer in comparison to the size, financial resources, nature, and structure of the employer’s business.  All employees who work for the employer, at all worksites, are counted when determining whether the 50 employee threshold is met, and thus, whether the exemption may apply.

Twenty-four states, including California, Georgia, Illinois, and New York, as well as the District of Columbia and Puerto Rico, (but not Florida), already require employers, under state law, to provide reasonable break time for nursing mothers.  The FLSA requirement of break time for nursing mothers to express breast milk does not preempt state laws that provide greater protections to employees (for example, providing paid break time, providing break time for exempt employees, or providing break time to express milk for a longer period than 1 year after the child’s birth).

Thus far, the DOL has not provided any guidance on the extent of any penalties that will be imposed against employers who fail to comply with the new break time provisions.

Although not expressly required by the FLSA amendment, employers should consider including a policy in their employee handbooks regarding break time for nursing mothers.

About the Author
Sheri D. McWhorter, JD, SPHR is a Florida Bar Certified Specialist in Labor & Employment Law, and is President and Managing Shareholder of WorkplaceLegal SolutionsSM, Law Offices of Sheri D. McWhorter, P.A.  With offices in St. Petersburg and Tampa, WorkplaceLegalSolutions provides client focused employee relations counseling and proactive employment law solutions to businesses and non-profits throughout Florida and the greater Tampa Bay area.  For assistance, please call 866. 829.1883.