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NEW JERSEY EMPLOYMENT LAW LETTER

JULY, 2010

Unpaid summer internships may violate federal wage and

hour laws

BYLINE: Pitney Hardin LLP

SECTION: Volume 18, Issue 9

LENGTH: 471 words

Must employers treat summer interns as employees and pay them minimum wage and

overtime? TheWage and Hour Division of the U.S. Department of Labor (DOL) re-

cently issued a fact sheet to answer that question. Summer interns may be exempt

fromwage and hour laws if the internship provides training for their educa-

tional benefit.

Six-factor test

To qualify for the exemption, a summer training program must meet each element

of the following six-factor test:

(*) Even though the program takes place at the employer's site, the internship

must be similar to training received in an educational environment. To meet this

requirement, you should structure the internship as an academic experience

rather than have interns perform routine business operations. The requirement

may be met if the intern's college monitors the program and offers educational

credits for participation in the internship. (*) The internship benefits theintern. You may not operate the internship to further your organization's busi-

ness needs. Rather, the program should be for the benefit of the intern. For ex-

ample, it should provide skills for the intern to use in various settings, and

the intern's role shouldn't focus on performing the routine work of the company.

If an intern spends his time performing clerical tasks or assisting the em-

ployer's clients, he will probably be considered an employee and must receive

wages. (*) The intern works under close supervision and doesn't displace em-

ployees. You cannot use unpaid interns to replace or supplement your regular

workforce. An intern may work closely with (or "shadow") an employee for train-

ing purposes but should perform little or minimal work during "shadow" training.

(*) The employer shouldn't benefit from the intern's activities, and in some

circumstances, the intern's activities may impede business operations. If the

internship benefits the employer's operations, the DOL will treat the intern asan employee for wage payment purposes. (*) The intern may not necessarily re-

ceive an offer of employment at the end of the internship. You should set a spe-

cific duration for the internship at the outset of the program. The intern

shouldn't have an expectation that the program is merely a trial period for per-

manent employment.

(*) The employer and intern understand that the intern will not receive wages.

To qualify for the exemption, you may not pay the intern for his participation

in the program.

Your internship program must meet all six factors to qualify for an exemption

fromwage and hour laws. Bottom line

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Employers of all sizes offer paid and unpaid summer training programs. The DOL's

guidance will help ensure that employers don't inadvertently violatewage and

hour laws when providing these programs. Copyright 2010 M. Lee Smith Publishers

LLC

LOAD-DATE: July 8, 2010

LANGUAGE: ENGLISH

Copyright 2010 M. Lee Smith Publishers & Printers