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Heat Placed on Summer Internships

Summer is finally upon us, and with it usually comes a group of eager young people clamoring for positions as interns with both large and small employers.

Employers, however, must be careful when taking on unpaid interns as a recent spate of lawsuits demonstrates. If employers view and treat interns as "free" labor, they may be opening themselves up to a lawsuit claiming that they violated state and federal laws regarding minimum wage and overtime pay.

So what can employers who want to hire interns do to avoid such a lawsuit? The most obvious thing would be to pay interns at least the minimum wage (with time and a half for hours worked over 40), but this is not an option for many employers.

The U.S. Department of Labor has provided some guidance on the issue. It has laid out the following six criteria to be applied in determining whether an internship can be excluded from the general rule that workers must be paid:

  1. The internship should be similar to the training that would be given in an educational environment
  2. The internship experience should be for the benefit of the intern (e.g. receiving college credits)
  3. The intern should not displace regular employees and should work under close supervision of existing staff
  4. The employer providing the training should derive no immediate advantage from the activities of the intern and on occasion may actually be impeded
  5. The intern should not necessarily be entitled to a job at the conclusion of the internship
  6. The employer and the intern should both understand that the intern is not entitled to wages for the time spent in the internship (it is a good idea to put this writing).

By following these guidelines, employers will minimize the likelihood that they will be successfully sued for unpaid wages.

It is also a good idea the keep track of the hours worked by unpaid interns and to stop them from working overtime. These records can help fight overtime claims in the event a lawsuit is filed.

The takeaway for employers is to carefully consider the ramifications before taking on unpaid interns. Those employers who do hire unpaid interns should try to create an environment for such interns similar to the educational environment and should remember that interns are there to learn and not to perform the mundane tasks of entry-level employees.

Avrohom Gefen is an attorney in the firm's Litigation Practice Group and also practices employment law. He can be reached at Agefen@vmmlegal.com or at 516-437-4385, ext. 119.