From the Lawyer’s Desk: Are You an Unpaid Intern?

By Frederick B. Kruger of Paule, Camazine and Blumenthal, P.C. 

Many young people, trying to break into the job market and various skilled positions, have been tempted to take or have taken an unpaid intern position as a way to build job related experience.  Sometimes this is an effective way to build experience, but often it is not.  Sometimes it is legal, but in some cases the employer is breaking the law.  No one wants to work for free, but then, most students must pay for their education.  The law is very restrictive on when an employer can offer an unpaid intern position.  However, based the difficult job market and recent news reports, the practice may be on the rise.

So when is an unpaid intern entitled to be paid?  The general rule throughout the United States is that an employer must pay each employee at least the current minimum wage, and generally speaking, pay an over-time rate of time and a half to any employee that works more than 40 hours in a week.  This law is based on the Fair Labor Standards Act (FLSA), and dates back to 1938, having been amended numerous times since then.  An employee cannot waive his or her rights under the FLSA; he or she cannot agree to work for less than the minimum wage nor agree to work overtime at less than the time and a half rate, if entitled to overtime pay.  An employee who accepts an unpaid intern position has done nothing wrong—but may have the right to recover from the employer unpaid wages based on these standards.  The law was written this way in order to protect workers—all workers—even if some wanted to take less money. 

So can an employee ever agree to work for free?  Maybe.  This is where the answer becomes more complicated.  First of all, volunteers who volunteer their time freely, without expectation of compensation, for religious, charitable, civic, or humanitarian purposes to non-profit organizations are excluded from these wage requirements. You generally cannot volunteer your time to a for profit company.  Second, volunteers who agree to take unpaid positions for state and local governments are, as a general proposition, excluded.  Finally, unpaid intern positions with for profit companies may be legal if a series of stringent tests are met: without listing them all, the employer has to prove that the primary purpose of the position is educational and for the benefit of the employee and not the employer; the training received by the intern cannot displace any regular employee and must be closely supervised by the employer; the employer cannot receive any immediate advantage from the employment; and the training must be similar to that one might receive in a vocational setting.  Convincing the U.S. Department of Labor that these requirements have been satisfied is difficult.

To summarize, unless an unpaid intern works for a non-profit or the government, there is a good chance that the employer is obligated to pay the intern at least the minimum wage and comply with the other aspects of Federal labor laws.                     

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