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Unpaid Internships & Labor Law: When Does Working For Free Violate Worker Rights?

Summer is in full swing but unfortunately the economy is still sputtering as the country moves toward recovery.  As college and high school students examine their job opportunities, many have discovered that is a massive decrease in the number of paid summer jobs usually filled by students.  Summer jobs are usually tied to retail and recreation, two sectors that have suffered big hits in a time when disposable incomes are at an all time low.

Faced with a large student work force looking for any gig they can land, many companies are gearing up recruitment for internships: unpaid internships, in particular.

This past April, the New York Times reported on what they argued was a less savory aspect of asking students to perform unpaid, unsupervised internships for little or no pay: exploitation.  After describing the story of one Will Batson, a Colgate University student who lived on couches and floors in New York City while completing an unpaid internship for WNBC, the Times asks, “What makes WNBC — whose parent company, General Electric, is valued at more than $200 billion — think it can get away with this?”  The Times frets “Far from being the liberal, pro-labor bastions of popular image, universities are often blind to the realities of work in contemporary America.”

While perhaps overstated, the Times asks an important question: when does a student who is desperate for experience is willing to work for free does it ever violate the Fair Labor Standards Act (FLSA)?

Acknowledging the explosion of such internships (and the sometimes dubious relationships between the companies and universities who organize them), the Department of Labor crafted a fact sheet including a “Six Factor Test” that can help a student determine if he or she should be compensated for their labor.  The Test involves such factors as work environment, primary beneficiary of the activity, and displacement of employees.

Check out the Actual “Six Factor Test” Below:

The Test For Unpaid Interns

There are some circumstances under which individuals who participate in “for-profit” private sector internships or training programs may do so without compensation. The Supreme Court has held that the term “suffer or permit to work” cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program.

The following six 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;

  1. The internship experience is for the benefit of the intern;
  2. The intern does not displace regular employees, but works under close supervision of existing staff;
  3. 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;
  4. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  5. 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 factors listed above are met, an employment relationship does not exist under the FLSA, and the Act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very broad. Some of the most commonly discussed factors for “for-profit” private sector internship programs are considered below.

Clearly, the factor that helps to legitimate most unpaid internships is if the intern receives credit for his or her labor.  Further, there should be clear learning objectives and description of the specific training given outlined in written form before the internship commences so the student has record of his or her efforts.

If you are a student or worker who feels their labor is being exploited in violation of Department of Labor policies, you should immediately contact a Washington Employment Law Attorney at Emery Reddy to discuss your options.

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