Employee, Intern, or Volunteer - Why This Matters

The signs of spring are upon us - the birds are chirping, flowers are starting to bloom and students are looking for work.  The job market is tight so many students and recent grads are willing to work for free.  Sounds great, right?  Not so fast. . .

Background
Under the Fair Labor Standards Act (FLSA), individuals who are “suffered or permitted” to work must be paid.  Internships in the “for-profit” private sector will most often be viewed as employment, unless the following criteria are met.  Interns in “for-profit” private sector entities, who do not meet these criteria typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.  NB: different standards apply for government and the non-profit sectors.

An Intern is an Intern If. . .
The following six criteria must be applied when determining if an intern is an intern:

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.

If the intern is an intern, there is no employment relationship and the intern would not be entitled to compensation or overtime.

Employers should be aware that simply labeling an employment relationship as an internship does not necessarily create an exemption from legal obligations to pay compensation for services performed.

Why This Matters
The accurate classification of individuals that regularly perform services for your organization is an important undertaking.  Misclassification can expose your businesses to costly litigation, penalties and damages.  Please contact me if you need assistance in this area or a more detailed discussion.

Special Treatment For Charitable Organizations
According to DOL, unpaid internships in the public sector and for non-profit charitable organizations, “where the intern volunteers without expectation of compensation, are generally permissible.”

So What’s The Difference Between An Intern And A Volunteer?
According to DOL, volunteer status is available only to individuals performing charitable activities for not-for-profit organizations.  Private sector, for-profit entities cannot engage volunteers.  Under the FLSA, a volunteer doesn’t receive compensation other than expenses and/or a nominal fee to perform services, and such services are not the same type of service for which the individual is employed.

Questions??  Contact me for a consultation or visit my website.