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With summer months fast approaching, many employers are considering employing interns. CAI’s Advice & Resolution Team often receives questions regarding pay requirements for interns. There seems to be one school of thought out there that says the employer can decide whether or not they pay interns. Well in fact, the USDOL (United States Department of Labor) has issued guidance on this issue (Fact Sheet #71)). This fact sheet specifies tests that must be met to exclude interns from minimum wage and overtime requirements under the FLSA (Fair Labor Standards Act).
The following criteria must be applied when making this determination:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If ALL of the above factors are met, an employment relationship does not exist under the FLSA, and the minimum wage and overtime requirements do not apply. If you have questions please reach out to any of our Advice and Resolution advisors for assistance.
For more information regarding this issue go to http://www.dol.gov/whd/regs/compliance/whdfs71.htm.