New Internship Standards from the Department of Labor

With summer right around the corner, many companies are considering whether or not an internship program is something that would be valuable for their organization. Your company might even be in a similar situation! The U.S. Department of Labor (DOL) has released a new set of standards to help employers determine whether interns must be paid the minimum wage and overtime under the Fair Labor Standards Act (FLSA) for their services. The standards apply only to those interns working for “for-profit” private sector employers. The term “employ” is loosely defined and most internships in the “for-profit” private sector are viewed as employment vs. training. Therefore, the interns should be classified in private sector employers as employee’s and would be subject to at least the minimum wage and overtime compensation for work that exceeds 40 hours per week.

While most internships in the private sector are subject to minimum wage requirements, the Supreme Court has held that the FLSA definition of work cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria.

The DOL fact sheet provides a list of six criteria that must be applied when determining whether an internship should be considered training rather than employment:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that 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 staff.
4. The employer that provides the training derives no immediate advantage from the activities of the intern and on occasion its operations might 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 these factors apply, an employment relationship does not exist under the FLSA and the law’s minimum wage and overtime provisions do not apply to the intern.

If your organization is interested in implementing an internship program this summer and you would like more information on FLSA standards, please contact your local staffing office. Midwest Staffing Group offers options for internships in addition to our standard temporary and direct placement staffing solutions!

Finally, experts advise that because of the variety of laws and legal issues that might arise, internship programs should be reviewed by counsel prior to implementation.

The DOL plans to continue reviewing the need for additional guidance on internships in the public and nonprofit sectors. For additional information, visit the DOL’s wage and hour division web site or call the agency’s toll-free information and helpline, 1-866-4USWAGE (1-866-487-9243).