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Monday, March 12, 2012

Interns and the FLSA

With the recent return of warm weather (at least in Chicago), it is time to start thinking about summer … and summer internships.  One question that comes up frequently with public employers with summer internship programs is whether wage and hour laws apply to their interns.  Specifically, we are asked whether “interns” must be paid at least the minimum wage and whether they must be paid overtime for hours over 40 in a week. The answer depends on whether the “interns” are considered “employees” under the wage and hour laws, including the Fair Labor Standards Act (FLSA), or are exempt under the “trainee” exception.

In order to qualify for the “trainee” exception to the “employee” definition, an individual must meet six rather strict requirements:

1.            The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school.

2.            The training is for the benefit of the trainees.

3.            The trainees do not displace regular employees, but work under their close observation.

4.            The employer that provides the training derives no immediate advantage from the activities of the trainees; and on occasion may actually be impeded.

5.            The trainees are not necessarily entitled to a job at the conclusion of the training period. 

6.            The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.

The key in applying these six criteria is whether the interns are substitutes for, or perform the work of, regular employees.  If, in the absence of an internship program, a public employer would assign employees to perform the tasks performed by the interns, then the interns are likely to be considered employees, not trainees.  If, on the other hand, the services performed by the trainees are considered to be dispensable (they would not be performed at all in the absence of the training program), then it is more likely that intern would be considered a trainee.

In structuring an internship program, a municipality, park district, or other public entity should consider the following:

a.         The internship should be established from the beginning with a fixed duration.

b.         The internship should not be merely a trial period used by the employer for individuals seeking employment at the end of the internship period.

c.         The training offered by the program should be educational in nature, along the lines of a school-sponsored practicum, with the facilities and service opportunities provided by the employer as a substitute for classroom or laboratory studies.

d.         The services performed by the intern should be dispensable services, and should not include work that is part of the employer’s core mission or business.           

e.         The services performed by the intern should consist of tasks or functions that regular employees do not perform during times when no internship program is in operation.

f.          Part of the understanding between the employer and the interns should be that they are not necessarily entitled to a job at the end of the internship program.

g.         Another part of the understanding between the employer and the interns is that the interns are not entitled to “wages” for the time spent in the internship program, and that any compensation they do receive does not qualify as, and is not considered to be, “wages”.

h.         The internship descriptions should read as though they are educational course descriptions and not job descriptions.  The word “work” for example, should not appear in an internship program description.  Employees “work”; interns or trainees perform services as part of a training program.

Your internship programs should be examined carefully to make sure that they meet the above criteria.  If they do not, then your “interns” could be regarded as employees subject to the minimum wage and overtime requirements of applicable federal and state laws.
Post Authored by Julie Tappendorf, Ancel Glink.

1 comment:

  1. Noteworthy article in interns and flsa..thanks and highly appreciate your efforts! Lisa Sample Job Descriptions