It’s that Time of Year – Unpaid Internships: Know the Law

Summer is just beginning and so are summer internships. Many of our clients are using interns for the first time since the Summer of 2019 – pre-pandemic. While doing so, it’s important for employers to comply with the Fair Labor Standards Act (the “FLSA”) to make sure their unpaid internship programs and their unpaid interns meet all the necessary criteria under the law.  The FLSA is the federal law that covers minimum wage, overtime pay, recordkeeping, and youth employment. 

For unpaid internships, the FLSA demands six requirements.  This applies all 50 states.  Additionally, New York state imposes an additional five requirements that also must be met in order to satisfy internship laws for For-Profit companies in New York.  These eleven factors are set forth below (a more detailed description of these factors can be found on the New York State Department of Labor website (click here):

1. The intern’s training is similar to training provided in an educational program.
2. The intern’s training is for the benefit of the intern.
3. The intern does not displace regular employees and works under close supervision.
4. The activities of the intern do not provide an immediate advantage to the employer. On occasion, operations may actually be impeded.
5. The interns are not entitled to a job at the conclusion of the training period and are free to take jobs elsewhere in the same field. The internship runs for a fixed period, set before the internship begins.
6. The interns are notified, in writing, that they will not receive any wages and are not considered employees for minimum wage purposes. Such written notice must be clear and be given to the interns before the internship or traineeship starts.
7. Any clinical training is performed under the supervision and direction of people who are knowledgeable and experienced in the activity.
8. The interns do not receive employee benefits.
9. The training is general and qualifies interns to work in any similar business. It is not designed specifically for a job with the employer that offers the program.
10. The screening process for the internship program is not the same as for employment and does not appear to be for that purpose. The screening only uses criteria relevant for admission to an independent educational program.
11. Advertisements, postings, or solicitations for the program clearly discuss education or training, rather than employment, although employers may indicate that qualified graduates may be considered for employment.

*Note: These are the requirements for unpaid internships in New York at For-Profit companies.  Laws for Non-Profit companies and companies in other states may and will vary.

While hiring unpaid interns should never be considered a money maker, failing to comply with the FLSA (and other applicable federal and state laws) can be a huge money loser!  Be careful in how you structure and conduct your unpaid internship to ensure you stay on the right side of the law. 

Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.