It is a tough market for new graduates. While the job market may not be as tough as it was a couple of years ago, it certainly has not recovered. My law firm receives resumes from job seekers every week. Some of those resumes are from students who just want to get their foot in the door. They offer to do unpaid internships. They say they just want experience. This seems to make sense. The problem is that this is a ripe area for employer abuse. Over and over again, we hear stories of students who thought they were getting unpaid internships where they gain valuable work experience. Instead, they are subjected to long hours, no training, and little experience that would actually benefit them in a future career.
The Fair Labor Standards Act (FLSA) addresses this problem. Under the FLSA, an intern must be paid a minimum wage and overtime if they are a “covered employee.” To determine whether an intern is a covered employee, the regulations issued by the Department of Labor look at the following factors:
– The extent to which the internship provides training similar to the training that would be given in an educational environment;
– The degree to which the internship experience benefits the intern rather than the employee;
– Whether the intern displaces regular employees;
– Whether the intern is closely supervised by existing staff;
– Whether the company derives immediate advantages from the intern’s activities;
– Whether the intern is entitled to a job at the conclusion of the internship; and
– Whether the employer and the intern have reached an agreement that the intern is not entitled to wages for his/her work.
This is a multi-factor test, and no one factor is conclusive. It is safe to say, however, it is rare that an intern would not be a “covered employee,” and thus entitled to pay. Students who are working “unpaid” internships would be well-advised to consult with a lawyer to see if they are the victims of wage theft.