Interns a source of free labor? Not likely.

on July 19, 2016

Businesses looking to save some money and complete a project often turn to interns. In today’s economy recruiters and hiring managers may also get a call from a job seeker asking to “intern for free” to “learn about your business.”

Intern however is not a synonym for free labor. In fact the Department of Labor notes that internships will most often be viewed as employment (and therefore subject to the minimum wage and overtime provisions of the FLSA), unless a test is met. The department will look at the following 6 criteria when applying the test:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment.
  2. The internship experience is for the benefit of the intern.
  3. The intern does not displace regular employees, but works under close supervision of existing staff.
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.
  5. The intern is not necessarily entitled to a job at the conclusion of the internship.
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very broad, the department says.

So think about internships as great PR and community relations; offering new graduates, young people and those exploring a career change the opportunity to learn about your business and business in general, but unless you can truly meet all six factors don’t consider them free labor.

Kathryn Carlson

Kathryn Carlson

Kathryn Carlson is the Vice President, Product Management for KPA. She focuses on developing compliance and workforce management solutions that combine innovative software, online training and on-site audit/loss control services for our clients.

Kathryn has over 25 years of product management, and product marketing experience and is certified as a HRCI Senior Professional Human Resources (SPHR) and SHRM-Certified Senior Professional (SHRM-SCP).

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Kathryn CarlsonInterns a source of free labor? Not likely.