Overview: Internships and other training programs can benefit employers in several ways. The most significant perhaps is the chance to observe the intern in action, which can help the employer to evaluate an intern's job fitness more deeply than a résumé, references and interviews ever could. Also, the experience that interns and trainees gain can help ready them to contribute immediately once they are hired, unlike other hires who may require on-the-job training.
Trainees and interns should be paid the minimum wage and overtime, as required for all employees under the Fair Labor Standards Act (FLSA), unless very strict criteria are met. Employers that wish to establish unpaid internships or training programs should carefully follow guidance from the U.S. Department of Labor and be sure they are following any relevant state requirements, as well.
Trends: A prominent lawsuit involving unpaid interns who worked for the Fox Searchlight movie studio has brought national attention to the issue. Such litigation can sometimes inspire copycat lawsuits, so employers that engage unpaid interns or trainees should be prepared for the possibility of a court challenge.
Author: Michael Cardman, Legal Editor
Updated to reflect information on a 7th Circuit ruling regarding the US Department of Labor's six-factor test to determine whether an intern or trainee qualifies as an employee.
When school is out, many students and new graduates look to gain real-world experience through internships. However, an employer hoping to take advantage of these interns as a source of free labor should think twice. Unless an internship satisfies strict criteria, interns must be treated like employees, meaning they must be paid the minimum wage and overtime.
This How To details the steps a prudent employer should take to increase the likelihood that interns or trainees are not employees.
In-depth review of the spectrum of Indiana employment law requirements HR must follow with respect to independent contractors.
HR guidance on complying with the FLSA requirements for interns and trainees.