Summer is quickly approaching, for some people that means summer intern season! If your company is planning on engaging an intern, or would like to but are concerned about the regulations, read further for some tips and guidelines to help keep you in compliance.
So, how can you determine whether your intern is really an intern or an actual employee? Well, the FLSA (Fair Labor Standards Act, which regulate wage and hour issues) has no practical definition of “employee”, what it does define is the word “employ”; including the words “suffer or permit to work”. Suffer or permit to work means that if an employer requires or allows employees to work they are employed and the time spent is probably hours worked. This standard has recently been very narrowly interpreted by the DOL (Department of Labor), and in a number of high profile cases, some large companies have ended up owing wages to interns.
Here are some tips if you want to engage interns and still stay in compliance:
- The internship, even though it includes actual operation of the facilities of the employer, is similar in training which would be given in an educational environment.
- 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 operation may actually be impeded.
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
- The trainee works for his or her own benefits to learn a profession or vocation with adequate supervision and instruction from the company.
- The company should not derive the primary benefit of the work performed by the intern.
- The trainee should not displace any paid employees.
The most important of these tips is the last three. If any of those factors are missing, the DOL will most likely classify the person as an employee.
The issue of how to classify employees – as interns and as independent contractors – has garnered a lot of attention in the last few years. These issues are going to continue to be a big source of concern for the DOL and for employers. If you really aren’t sure about whether that college student is an intern or not – your best bet is to pay them minimum wage. It is less expensive than a full-time employee and far less expensive than a lawsuit. If you have any questions, or need help assessing your employee classifications, give us a call or send an email. We are here to help!