Summer Interns: Are They Excluded from FLSA's Minimum Wage and Overtime Pay Requirements?

Friday, May 10, 2013

 

Interns are an excellent way to “preview” a potential future employee for many organizations.  Many interns return as full time, highly talented employees after spending a summer with a prospective employer.  The problem is that some organizations use this talent pool without proper regard for the Fair Labor Standards Act (FLSA) minimum wage and overtime guidelines.  Xuedan Wang, a former unpaid intern for Harper’s Bazaar (Hearst Corporation) filed a lawsuit in February 2012 alleging that Harper (Hearst Corporation) failed to recognize her as a regular employee, eligible for protection under the FLSA minimum wage and overtime rules and New York labor law.

 

Previously, the US Department of Labor issued (April 2010) new guidelines for unpaid interns in the form of a DOL “factsheet”.  The fact sheet outlines six (6) criteria for an unpaid intern to be exempt from “an employment relationship … under the FLSA”:

 

“1.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;

2. The internship experience 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 that provides the training derives no immediate advantage from the activities of the intern; and 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.”

 

Apparently, where Harper (Hearst Corporation) may have run into a problem was that the internship program did not meet one or more of these six (6) conditions.  The fact sheet expands on the six (6) guidelines in three (3) illustrative manners:

 

● “In general, the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience.”

 

● “If an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods, these interns should be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.”

 

● “The internship should be of a fixed duration, established prior to the outset of the internship.”

 

Wang alleged “that Hearst used interns … to complete tasks necessary to its operations such as to answer phones, make deliveries, and organize clothing and accessories.”  Furthermore, Wang alleged “that Hearst violated … [both] the FLSA and the New York Labor Law.”

 

Both paid and unpaid interns have potential advantages for employers and employees.  However, clearly professional level assistance should be sought in addressing and dealing with federal, state, and local wage and labor laws.