Taking on Unpaid Summer Interns? Don’t Take on a Lawsuit, Too…

“… when a complaint is made, the price of an unlawful internship can be quite high. Failure to pay wages, failure to pay minimum wage, overtime, meal and rest violations, and related penalties and attorneys’ fees and costs can add up quickly.” (Ervin Cohen & Jessup)

“Summertime, and the livin’ is easy…” Unless, of course, that summer intern you hired decides to sue you because she thinks she should have been paid for her work. And that can cost a lot more than $7.25 an hour…

Want to avoid a lawsuit over your internship? Follow these five recommendations:

1. Get it in writing:

“Enter into a written agreement with the intern specifying the parameters of the internship, confirming that the internship is unpaid, and documenting any educational experience and educational credits the intern will earn for participating in the internship.” (Foley & Lardner)

2. Remember the basics:

“All ‘employees’ of a business must be paid at least minimum wage unless they are a ‘trainee’ under the law, regardless of whether they are called an ‘intern.’ So, what makes a trainee? The United States Department of Labor has established a six-factor test couched in terms of – you guessed it – training – to determine whether an unpaid intern should be considered an employee or trainee under the Fair Labor Standards Act.” (Looper Reed)

3. Ask the right questions:

“Whether an unpaid internship would occur under the auspices of an educational institution or otherwise, ask yourself this: If there is a later FLSA claim, will the circumstances clearly, provably, and readily show (i) that the relationship was for the purpose of providing education, instruction, and training that imparted significant, substantive, transferrable knowledge of a broadly-applicable kind; and (ii) that what actually occurred was consistent with and carried out this purpose?” (Fisher & Phillips)

4. Don’t forget about state laws:

“Many states, however, have their own wage and hour laws with additional factors to consider in determining whether a worker is an ‘intern’ or an ‘employee.’ New York, for example, uses an 11-factor test and California, since April 2010, has employed a six-factor test—similar to the one used by the DOL. Accordingly, employers must carefully examine their internship program’s practices and policies to protect themselves from future wage and hour liability.” (Epstein Becker Green)

5. Talk to your lawyer:

“It is highly recommended that companies consult with experienced counsel in the drafting of a written unpaid internship policy, along with appropriate training of its employees, prior to the implementation of such a program.” (Poyner Spruill)

The updates:

Find additional updates on Unpaid Internships at JD Supra Law News>>