HR Alert: What You Need To Know Before Hiring An Unpaid Intern

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Our last post discussed important tips for hiring temporary paid employees. Today we discuss the things you must consider before taking on an unpaid intern.

The federal Fair Labor Standards Act (“FLSA”) requires that most employers pay employees at least minimum wage for their work. Interns, however, are not required to be paid. So, what’s the difference between an employee and an intern?

It’s not as simple as the job title given to a new hire. Even if an individual is hired as an unpaid “intern” and doesn’t expect to be paid for her work, she still may be entitled to pay under the FLSA, and this may expose your business to liability. As a result, employers must consider several factors before determining whether it’s appropriate to not pay an intern.

An “intern” may be unpaid only when she’s the primary beneficiary of the so-called internship. Generally, this occurs when the intern and the employer clearly understand that the intern won’t be paid, and the internship provides the candidate with training similar to that which would be given in an educational environment. To determine whether an intern is a primary beneficiary, the employer also should consider the following:

  1. Is the internship a part of the intern’s schoolwork, and does she receives academic credit for the work?
  2. Does the internship correspond to the intern’s academic calendar?
  3. Is the duration of the internship limited to a time period that’s beneficial to the intern’s learning?
  4. Does the intern’s work complement, rather than displace, the work of a paid employee and provide educational benefits to the intern?
  5. Do the intern and employer understand that the internship doesn’t entitle the intern to a paid job at the end of the internship?

If the answer to one or more of these questions is “no,” you may be required to pay the intern to avoid a violation of the FLSA. If you have questions about your obligations under the FLSA or any other employment concerns, call us. Our attorneys would be delighted to assist you.

Lisa Coppola

Written by Lisa Coppola

Founder of The Coppola Firm

Lisa A. Coppola, Esq. understands the challenges her clients face, whether they’re starting a new business, taking their existing operations in a new direction, or facing a claim or threat.

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