HR Tip of the Week

Posted on  |  Hiring and onboarding

8 Myths About Interns Debunked

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A summer internship can be a great way for students to learn skills that apply to their field of study and most employers welcome the opportunity to help students prepare for the workforce. But, if you have interns, be mindful of benefits and protections available to them under the law. To help you understand the rules, we debunk several common myths related to interns.

Myth #1: Internships can always be unpaid.

Fact: Unless very narrow tests are satisfied, employers must pay interns for all time worked. The Department of Labor (DOL) uses a six-part test to determine whether an intern must be paid under the Fair Labor Standards Act. In addition to the DOL test, some states and federal courts have their own tests to determine whether an intern is entitled to pay. Understand all tests that apply in your jurisdiction and evaluate each internship relationship on a case-by-case basis. When in doubt, pay interns at least the minimum wage per hour and overtime, when applicable.

Myth #2: Internships only need to satisfy a majority of the DOL's test.

Fact: To be considered an unpaid internship under the DOL's test (which applies to for-profit employers), the internship must meet all six of the following criteria:

  1. The internship is similar to training that would be given in an educational environment;
  2. The internship is for the benefit of the intern;
  3. The intern does not displace regular employees but works under close supervision of existing staff;
  4. The employer derives no immediate advantage from the activities of the intern (on occasion its operations may actually be impeded);
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Myth #3: Unpaid interns need to learn the business from the ground up, so menial tasks, like fetching coffee and answering phones, will satisfy the six-part DOL test.

Fact: If menial tasks are a significant part of the internship, it will likely fail to satisfy at least a couple of the criteria above, including the requirement that the internship be similar to training provided in an educational environment. If the internship does not meet all six criteria, the intern must be paid.

Myth #4: Even if an intern is entitled to pay, I can pay him or her a stipend rather than the minimum wage.

Fact: If an intern is entitled to pay, the intern must receive at least the minimum wage for each hour worked and overtime pay whenever he or she works more than 40 hours in a workweek (some states require overtime in additional circumstances). A stipend cannot be used to avoid meeting these requirements.

Myth #5: We can sidestep the issue of paying minimum wage and overtime by classifying interns as independent contractors.

Fact: An individual must satisfy very narrow tests to be considered an independent contractor. The typical intern would not meet these tests. Generally, independent contractors are self-employed and offer their services to the general public under a contract or agreement. Before classifying any worker as an independent contractor, carefully review the various tests applicable to your business and consult legal counsel as needed.

Myth #6: Interns aren't protected by nondiscrimination laws.

Fact: Under federal nondiscrimination law, the question of coverage depends on whether the intern is considered an employee. The Equal Employment Opportunity Commission (EEOC) has suggested that an otherwise unpaid intern might be considered an employee if he or she receives "significant remuneration" in some form, such as a pension, group life insurance, workers' compensation, or access to professional certifications. An intern who receives only some small benefit that is "inconsequential," such as academic credit or scholarly research, may not be considered an employee. If an intern is paid, however, the EEOC suggests looking at all aspects of the intern's relationship with the employer, focusing in particular on whether the employer controls the means and manner of the intern's work performance, to evaluate whether the intern is an employee. Regardless of whether the intern is an employee, he or she is protected from discrimination when applying for and/or participating in training or apprenticeship programs.

Note: Some jurisdictions, including California, New York and Illinois, have enacted laws that expressly protect unpaid interns from discrimination and/or harassment even if they aren't considered employees under other employment laws. Check your state law to ensure compliance.

Myth #7: We provide interns with meals but not pay, so they don't need to complete an I-9 form.

Fact: In general, a Form I-9 (Employment Eligibility Verification) is not required for a bona fide unpaid intern. However, if you provide an intern with anything of value in exchange for their work, such as meals or lodging, an I-9 form must be completed. As a reminder, the United States Citizenship and Immigration Services (USCIS) recently published a new version of the I-9 form, which employers were required to begin using by January 22, 2017.

Myth #8: Paid interns aren't entitled to paid sick leave.

Fact: Several states and local jurisdictions have enacted laws that require employers to provide paid sick leave to employees, including paid interns. Under these laws, if paid interns meet the eligibility requirements for leave (such as working at least a certain number of hours in that jurisdiction), they generally would be entitled to paid sick leave. If you're subject to a paid sick leave requirement, make sure you provide paid sick leave to all eligible individuals. In the absence of a paid sick leave law, employers generally don't have to provide paid sick leave to paid interns unless they have promised otherwise.

Conclusion:

If you have unpaid interns, make sure the relationship truly satisfies all applicable tests to be considered unpaid. For paid internships, make sure you comply with minimum wage, overtime, and other federal, state, and local employment laws.

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