Unpaid Intern or Paid Trainee?

Question:

We are considering recruiting several college students for our summer internships. Do we have to pay them?

Answer:

In some cases, individuals working for an employer in a training capacity do not qualify as formal “employees” under the Fair Labor Standards Act (FLSA), and therefore do not have to be paid as you would an employee. The trainee’s activities and work completed during the internship will determine their legal employment status.

The following criteria are used to determine if the trainees or students are employees within the meaning of the FLSA. ALL of these criteria must be met in order to legitimately establish the internship as unpaid.

  1. The training, even though it includes actual work done at the facilities of the employer, is similar to that which would be given in a vocational school. The learning experience encompasses a sequence of activities that build upon one another, increase in complexity, promote mastery of basic skills, and are coordinated with education provided via the school based learning component.
  1. The training is for the benefit of the trainees/students.
  1. The trainees/students do not displace regular employees. The placement of trainees/students does not result in the employer not hiring an employee it would otherwise hire and does not result in an employee working fewer hours than he or she would otherwise work.
  1. The employer receives no immediate advantage from the activities of the trainees/students and, on occasion, may have operations impeded. Any productive work that the trainee performs would be offset by the burden to the employer from the training and supervision provided.
  1. The trainees/students are not necessarily entitled to a job at the conclusion of the training period. This does not preclude employers from offering a position at the end of the training program.
  1. The employer and the trainees/students understand that the trainees/students are not entitled to wages for the time spent in training.

The Employers Association

About the Author:

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Tracey Chantry graduated from Radford University with Bachelor’s Degree in Criminal Justice and has spent 15 years in Human Resources, 10 of which have been in a leadership role. She is a certified Professional in Human Resources (PHR). She has extensive hands-on experience leading HR initiatives including policy design, training and development, compensation, performance management, recruiting, compliance reporting, and benefits administration. For fun, she enjoys spending time with her family and friends and stays active by walking, running and swimming. She and her husband Pete have 3 kids that range in age from 12 to 24 years old.

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