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Are you short-changing your interns?

Do you use interns and students in your for-profit business instead of hiring secretaries? If they are working for free, and the experience is not purely educational, you might be violating the law. If you are an intern or a student performing purely grunt work that a clerical employee would normally handle, you might have a legal entitlement to receive at least minimum wage for the time spent working as an intern.

Recently, the Wage and Hour Division of the U.S. Department of Labor (US DOL) issued new rules with the factors that should be weighed, when deciding if an unpaid intern is an intern only in name, but an employee in practice. The US DOL stresses that the main focus of the inquiry is to determine who the primary beneficiary is, of the individual's work. If the answer is "the employer," then the intern might be an employee. Factors that the US DOL will consider include:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.

  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.

  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.

  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.

  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.

  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.

  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

These factors are flexible, and the US DOL stresses that no single factor is determinative. Instead, the US DOL looks at the relationship as a whole to determine whether there is an employer-employee relationship or whether the employment is more of a learning experience. Here is the link for more information:

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