Have an unpaid Intern? Federal Labor Rules Apply

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July 13, 2009

It's summertime, and time for an annual rite of passage: internships. Hiring an unpaid intern makes financial sense to many businesses in today's economic times. With many colleges now requiring internships as part of the curriculum, internships are in more demand than ever before.

The attractive offer of free labor comes with some stipulations, however. Federal labor laws under the Fair Labor Standards Act are designed to make internships benefit the interns, not necessarily their employers. Here are some of the rules to keep in mind:

  1. Employers should receive 'no immediate advantage' from what an intern does (and at times may impede operations).
  2. Interns cannot displace or do the work of a regular employee.
  3. Interns must receive training similar to what would be offered in a vocational school.
  4. Both the intern and the employer must understand the intern is not entitled to wages.
  5. Both the intern and the employer must understand the intern is not entitled to a full-time position at the conclusion of the internship.

Other rules apply to independent contractors and to volunteers. The Department of Labor  offers additional information on its web site at www.dol.gov/elaws/esa/flsa/scope/er15.asp. Your local Wage and Hour District office can also provide additional information.

-  U.S. Department of Labor

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