Avoiding Commercial Employment Lawsuits Regarding Unpaid Internships

If you are a private sector employer who may be considering internship programs that coincide with university academic semesters and summertime recess program, you should consider carefully whether the position falls under a paid or unpaid position under the Fair Labor Standards Act. The last few years there has been a lot of attention paid to cases filed by unpaid college interns in state and federal courts claiming that employers have violated labor hour and wage laws. To avoid a lawsuit, you should be familiar with the Fair Labor Standards Act. A commercial litigation attorney can answer your questions and advise you on how to stay out of court.

Employees vs. Trainees

According to the Fair Labor Standards Act, persons who perform services for profit companies may be viewed as employees entitled to minimum wage and overtime for any hours worked past 40 in a work week unless they meet the test for a trainee. A trainee classification means that the individual can perform duties as an unpaid intern position, if the following six criteria are met under the unpaid intern test:

Unpaid Intern Test

• The internship is similar to training that the individual would receive in an educational or academic environment. It should be for a fixed period of time.
• The experience is for the benefit of the intern
• No regular paid employee is displaced by the internship
• The intern works under supervision of the staff
• The employer provides the training without receiving an advantage
• Intern is not necessarily promised a position at the completion of the internship
• Both the emplo9yer and the intern understand that the position is unpaid

The more general the activities and skills that the intern performs that can be used for multiple employer situations, the less likely the intern will be viewed as an employee. Also, programs that are structured around academic experiences as part of the intern’s academic credits are also criteria that distinguishes whether the intern is a trainee or employee. In order to avoid a lawsuit, the employer should not use the internship as a trial period for hiring the person after the internship period. If the individual has expectations that the individual will be hired, then the individual would most likely be considered an employee, and the employer would be required to provide the individual with compensation.

Volunteer Services to State or Local Agencies or Non-Profit Organizations and Charitable Organizations Exempt from Paid Internship Requirements

Individuals who volunteer their services to a state or local agency,for non-profit charitable organizations and for humanitarian purposes are eligible for unpaid internships, and the employer is not required to pay compensation for the volunteer services.

Since lawsuits involving internship positions are complex, the assistance of a New York commercial litigation attorney is recommended.