From: www.twc.state.tx.us (Texas Workforce Commission)

Student Interns - Trainees    Top of Page There is no FLSA exception as such for "student intern". The term "intern" appears only once in the FLSA itself, in section 203(e)(2)(A), which exempts Congressional interns from the definition of "employee"; and only once in the regulations, in 29 C.F.R. 541.304(c), where it is explained that medical interns do not have to be paid on any particular basis, just like the situation is with doctors, attorneys, and teachers, as long as they have graduated with a medical degree necessary to practice medicine, i.e., they are no longer "students", except perhaps in a post-graduate program. To have a better understanding of how student interns are treated under the FLSA, one has to realize that such workers are in essence "trainees". The DOL has a fairly extensive set of rulings and other guidance on "trainees", as explained in the paragraphs below. Certain types of trainees are completely excluded from FLSA coverage. However, the requirements for such total exclusion are quite stringent. In an administrative letter ruling dated February 22, 1974 (WH-254, BNA WHM 99:1152), the DOL stated that if a person is considered a "trainee", that person is not considered an "employee" and does not have to be paid minimum wage and overtime. The letter gave the following six criteria for the designation of a person as a trainee; commentary on each criterion follows in italics:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school.

The closer it is to a classroom or educational setting, the easier it will be to consider the individuals to be trainees. The arrangement might also result in a training certificate that could be listed as a job qualification on subsequent job applications. It would also help if the individual and the entity providing the training could first develop an individualized training plan that would be tailored to help the individual qualify for a specific job or range of jobs with a variety of companies via the training course.

 2. The training is for the benefit of the trainees.This would be an easy argument to make in the case of individuals participating in welfare-to-work programs, but also in any training or internship programs that tend to increase their "hireability" in the open job market.

 3. The trainees do not displace regular employees, but work under close observation.This would also be an easy argument to make, especially in the case of a training "academy" run by a company, but also for a work experience program sponsored by a governmental entity. In the latter case, the government agency would be able to show that were it not for the work experience program, the activities in question would not be taking place. In a true training environment, the trainees are not going to be trusted to do much actual work for the company; the actual production would presumably be done by regular employees, who of course are already trained.

 4. The employer that provides the training derives no immediate advantage from the activities of the

trainees, and on occasion his operations may actually be impeded.This goes hand-in-hand with item # 3 above. It would be important here to document the training process and the before and after figures for comparison. Again, the actual productive work will be done by regular employees; any productive work done by trainees would have to be insubstantial in nature and amount and secondary to the training process.

 5. The trainees are not necessarily entitled to a job at the completion of the training period.Again, this is related to #3 above. The work would not be done at all, or at least certainly not on the schedule that exists, were it not for the existence of the training school or program under which the

individuals receive training. The courts find it important to have a written agreement to the effect that trainees have no expectation or guarantee of employment upon completion of the training.

 6. The employer and the trainees understand that the trainees are not entitled to wages for the time

spent in training.The courts find it important that there be a written agreement to the effect that payment for the services is neither intended nor expected.

 The ruling went on to note that since the trainees' work products were sold by the employer, a vocational-technical school, and thus benefited the institution, and since the work done by the trainees limited the employment opportunities of regular employees who would otherwise be producing those goods, the students were not "trainees" and were thus covered by the FLSA. These six criteria also appear in the DOL's Field Operations Handbook in section 10b11, and are mentioned in other letter rulings from DOL, two of which are excerpted below, one dealing with security guard trainees and the other dealing with training programs that last 18 months and work performed by mental hospital patients. Government-sponsored employment development programs are addressed in Field Operations Handbook section 10b11a. DOL issued Fact Sheet #71 dealing with this issue in April, 2010 – it may be downloaded at http://www.dol.gov/whd/regs/compliance/whdfs71.htm. With the above criteria in mind, it would probably be important, in any publicity or discussions about the training school, to describe it as a type of school or "academy" that is meant to prepare individuals for entrance into an industry, i.e., any company in an industry, rather than as an orientation period for becoming an employee of a specific company. If the training is part of a government program, it would be important to bill it first and foremost as a benefit to hard-to-place or first-time workers and as a way to help them bridge the gap between government assistance and work, rather than as a way to get public works done that may have been on the back burner for a time due to lack of funding or other resources. Put another way, any productive work done by the individuals is more like a serendipitous by-product of training programs for difficult-to-place individuals, than a primary goal of the program. The court decisions regarding this issue always use one or more of the above criteria to justify a ruling that certain individuals are not employees for purposes of the FLSA. One court decision found that the persons were trainees during the first part of a training program, but not during the second half, since the first part stressed classroom-type learning under close supervision, but the second half dispensed with the focus on classroom activities and close supervision and stressed activities that were basically indistinguishable from those of regular employees. A landmark case in this area is that of Donovan v. American Airlines, Inc., 686 F.2d 267, 25 WH Cases 901 (5th Cir. 1982). The case involved a well-known training academy run by American Airlines for flight attendants and other airline personnel; the students received no pay for the training they received both in the classroom and in airplanes. Further, any work they did was secondary to the training program. Importantly, the airline was not obligated to hire the graduates of the program, and other airlines generally considered the training to be a good qualification for hire. A Fifth Circuit case, Atkins v. General Motors, Inc., 701 F.2d 1124 (5th Cir. 1983), ruled that people who participated in a state-sponsored training program that included hands-on experience and was designed to provide the company with a trained pool of workers were not employees, but rather trainees. The courts seem to find that the most important determinant is the question of who primarily benefits from the arrangement. If the employer is the primary beneficiary, the individuals will be considered employees, but if the individuals are the ones who primarily benefit from the work experience, they will be considered trainees. Some illustrative letter rulings in the area of trainees include: 

Admin. Op. WH-162, May 3, 1972 (BNA, WHM 99:1087): 

This is in reply to your letter of March 31, 1972, concerning compensable work time of security guard trainees who will receive 40 hours of training required by a services contract before they are allowed to perform work pursuant to the contract...

...Whether time spent in training is compensable is discussed on pages 7 through 9 of the enclosed pamphlet, Hours Worked. Under the six criteria given on page 9 for determining the employment relationship of trainees, we would view the security guard trainees as employees. The training is oriented in terms of "company practices, policies, and rules", and is required under the terms of the contract before any employees are permitted to perform work pursuant to the contract. This indicates that the employer derives an immediate advantage from the training. The training is given to persons who will work on the contract, and the employer can fulfill the contract only by employing such specifically trained employees.

Additionally, the training time is not excluded from consideration as hours worked under any of the standards discussed on pages 7 and 8. Therefore, ...the employee should be paid for all time spent in learning his job. Hours worked generally includes the time spent in initial indoctrination and training as well as time devoted to subsequent training...It is not lawful to compensate only those who complete the training and are "hired"...

 Admin. Op. WH-229, June 29, 1973 (BNA, WHM 99:1131): 

1. If all six of the criteria listed on page 3 of the pamphlet, Employment Relationship, are met, the trainees are not employees within the meaning of the Fair Labor Standards Act. The monetary requirements of the Act do not apply where there is no employment relationship.

These tests were derived from two cases adjudicated by the Supreme Court in 1947. These cases involved voluntary participation in training programs. See Walling v. Portland Terminal Co., 330 U.S. 148 [6 WH Cases 611], and Walling v. Nashville, Chattanooga and St. Louis Railway, 330 U.S. 158 [6 WH Cases 615]. 2. The phrase you quote concerning persons who "may work for their own advantage on the premises of another" was taken from the Portland Terminal case and must be read in context with the other criteria. There is no single rule or test for determining whether an individual is an employee under the Act. The purpose and the manner in which an individual enters a training program are among the factors to be considered in determining whether there is an employment relationship. Whether participation is voluntary is considered in context with the other enumerated criteria. If the work-training activity is voluntary and all six criteria given are met, the trainee would not be considered an employee under the Act. We would need more information to assess the situation given in part (b) of your question concerning a mentally retarded individual whose participation in a training program may not be "voluntary". 3. We would need more information to respond fully to this question. In general, a program of 18 months of work-training in which the trainee does productive work would not appear to fit under the six criteria. The cases cited above, from which the criteria were taken, involved training programs of seven or eight days' duration. Additionally, other criteria may be used in situations that are different from those in the Portland Terminal case. For example, we have departed from that case with respect to tasks performed by patients in mental hospitals who are required to remain under treatment for extended periods when the tasks they perform have been determined, as a matter of medical judgment, to have therapeutic or rehabilitative value in the treatment of such patients. 4. Work done in activities centers by resident patients of mental institutions has always been considered as being performed pursuant to an employment relationship between the patient and the institution. Whether the product worked on or produced by the employee is destined

for purchase by a profit-making or a charitable organization would have no effect on the determination of employment relationship as such.

 Liability Under the Fair Labor Standards Act    Top of Page Any employee or former employee may file a complaint with the DOL's Wage and Hour Division that an employer failed to meet its obligations under the FLSA. The DOL has the authority to investigate and make a ruling, and if it determines that the employer owes the employee back wages, it may enforce the ruling by a variety of methods:

conciliation - if the DOL can persuade an employer to cooperate, it may supervise a settlement of the claim between the employee and employer, in which case the employer may be able to escape with only liability for back pay (Section 216(c);

civil action for back pay and damages - the DOL may sue on an employee's behalf to recover back wages and liquidated damages (Section 216(c);

injunction - the DOL may apply for an injunction to restrain further violations by the employer or to restrain the sale or transfer of goods produced with labor that was compensated in a way that violated the FLSA (Section 217);

criminal action - under 29 U.S.C. 216(a), the U.S. Department of Justice may bring a criminal action against an employer in the case of a willful violation of the FLSA; and

civil actions by employees - employees have the right to file suit in a court of competent jurisdiction to protect their rights under the FLSA (29 U.S.C. 216(c)).

If the DOL determines that there is no merit to the employee's claim, it will issue a "right to sue" letter under 29 U.S.C. 216(b) (a "216(b) letter") notifying the employee of his or her right under that provision to file a civil action in court to recover any amounts that might be due. As a practical matter of enforcement, due to limitations on agency resources, DOL will often issue "216(b) letters" even to those wage claimants who have valid FLSA complaints. Dealing with FLSA Claims or Audits    Top of Page Without a doubt, the FLSA is full of potential trouble spots for an employer, and the law gives the DOL enough teeth to be tough when investigating wage claims and enforcing the FLSA. It is good to be prepared with strategies for handling wage and hour investigations involving your company. A wage claim or DOL audit is never a trifle. Even if you have a solid legal position, you must treat the situation as if you may end up having to pay extra money to employees or ex-employees. While there is no guaranteed formula for success, there are certain things you can do to encourage the wage and hour investigator to at least not view you or your company as a burden:

Present the requested information in a timely, concise, and organized manner. That will not only make things easier for the investigator (remember, you want the investigator out of there as quickly as possible), but also make your company look more credible and as if it has nothing to hide.

Do not make charges, allegations, or assertions to the investigator that either have nothing to do with a wage and hour situation, or else deviate too much from standard wage and hour law principles.

Treat the investigator with as respectfully as possible. DOL procedures leave investigators a surprising amount of discretion in the areas of regular rate calculations, pay method determinations, and hours worked, so it is worth an employer's while to be pleasant, cooperative, and informative.

Be familiar enough with the wage and hour laws to know a good deal when the investigator offers it. Be careful – stonewalling, demanding, or asking for too much can easily backfire! Knowing when to say "OK" is a real art.

Consider hiring an experienced wage and hour law attorney. This is especially important in case the investigator has signaled a ruling against your company and is only concerned with calculating the amount, or in case the ruling has already gone against your company and you are trying to decide whether a settlement offer from the DOL makes any sense.

 

Recommendations for FLSA Compliance    Top of Page While court decisions do not lay out an express road map for avoiding corporate or personal liability under the FLSA, those decisions, as well as court rulings involving other types of employment laws, offer some strategies for minimizing the risk of claims or lawsuits:

Educate yourself about the intricacies of wage and hour law. To the extent possible, train other managers and payroll department staff the same way. Do not hesitate to call the DOL and your state's wage payment law enforcement agency for help,

advice, and training if possible. If you become aware of wage and hour violations, correct them as soon as possible, even if it means

extra work for staff. If higher-ups hinder your efforts at wage and hour compliance, remind them in a diplomatic but clear

way that personal liability can extend to anyone who had a hand in the allegedly illegal pay practice. If all else fails, document your wage and hour advice to senior management and advise them of the

possible consequences, thus putting yourself on record on the "right" side of the law and arguably removing at least yourself from the liability loop.

There are lots of blogs and articles though who are mentioning the use of unpaid interns in violation of minimum wage and possibly overtime laws. See therefore the

links below:http://laborlaw.typepad.com/labor_and_employment_law_/2007/11/unpaid-internsh.html

Unpaid Internships - Common but Illegal

A common, but frequently unreported labor violation is the use of unpaid interns in violation of minimum wage and possibly overtime laws.  The scenario is fairly typical: a company offers an opportunity to ‘break into the business’ in exchange for the intern working for free.  You see many examples of this in the entertainment industry.  In fact, despite jobs sites such as Craigslist prohibiting the posting of unpaid “internships,” you can almost always find one posted.  Some companies try to get around the law by requiring that the internship be part of a college program.  However, there is no exception to the law allowed just because the “intern” may receive college credit.  While it might be possible for a college credit course to require some type of training for a company, the vast majority of these internships are in violation of Federal as well as California labor laws. In order to qualify as an unpaid internship, the requirement is simple:  no work can be performed that is of any benefit at all to the company.  That is, you can not deliver mail, sort files, file papers, organize a person’s calendar, conduct market research, write reports, watch television shows and report on them, read scripts, schedule interviews, or any other job that assists the employer in any way in running their business.   

Examples of internships that have been legal are where the job is a “dummy” job.  For example, there was a case of an internship for working on a train.  The company had the interns driving trains from one end of their yard to the other under close supervision.  The moving of the trains was completely unnecessary and was just being done to train the potential employees. As such, no “work” was being performed, so the internship was legal.  On the other hand, if the workers were moving the trains as part of the regular re-positioning of the trains, but were still performing it under close supervision, they would be required to be paid for the work. Thus, if in the entertainment industry, you read scripts that have already been read and rejected by the company and the company will not use your input in any way but is simply instructing you on how to read scripts, then they would not need to pay you for your time.  However, if you read the scripts and perform any work that is used by anyone in the company to make any type of decision about that script, then you must be paid for your time. Another common type of unpaid internship is in martial arts schools that require students to teach classes in order to receive additional belts.  This practice is illegal unless the student is paid for the time.  Because the act of teaching a class is work that benefits the employer, it must be paid for.   The U.S. Department of Labor has outlined a list of criteria that ALL must be met in order for an internship to be unpaid.

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;

2. The training is for the benefit of the trainee; 3. The trainees do not displace regular employees, but work under close observation; 4. The employer that provides the training derives no immediate advantage from the activities of

the trainees and on occasion the employer’s operations may actually be impeded; 5. The trainees are not necessarily entitled to a job at the completion of the training period; and 6. The employer and the trainee understand that the trainees are not entitled to wages for the

time spent in training.

From the above list, #4 is really the key one – all the others will follow from whether the employer derives any immediate benefit from the activities. The main reason that you do not see more lawsuits regarding unpaid internships is that the interns are very unlikely to sue.  In most cases, they fear being blacklisted, as they will undoubtedly need to use the internship as a reference to get any future work. This is where California’s Private Attorney General Act comes in.  Because this law allows anyone at the company to sue for labor violations, even if they themselves are not affected by the violation, it is now possible for these companies to be brought into compliance with the law.  If you work for a company that uses unpaid interns and would like to put an end to this illegal practice, you should consider bringing a Private Attorney General cause of action. Of course, if the internship is work, not only minimum wage must be paid, but also California overtime (8 in a day / 40 in a week) as well as meal and rest breaks.

 http://flsa.blogspot.com/search/label/mcdonald%27s%20flsa%20exemption%20compliance

Hiring interns for free labor is a no-no2 Comments E-mail a friend Digg it

By KATHERINE REYNOLDS LEWISNewhouse News Service

KRAIG SCATTARELLA / THE OREGONIAN

Kevin Platt, left, works on a project with Thom Schoenborn during Platt's first day as an unpaid intern at Pop

Art, an Internet marketing agency in Portland.

Summer interns are ripe for exploitation.

They're desperate for real-life experience to help them land a permanent job, at a time when the economy is slowing and positions are scarce. Many are willing to work for free or below-market rates, just to get a foot in the door.

But that doesn't mean employers should take them up on the offer.

"It's very tempting to try to come up with unique ways to get more out of your company, but the way to do it is not to bring in people who are unpaid," said Jay Zweig, a labor lawyer at Bryan Cave in Phoenix. "An internship, to be unpaid and legal, needs primarily to be a learning experience for the intern and not something where the intern is expected to produce work product that is going to benefit the employer."

Take Kelly McCausey, owner of Mom's Talk Network in Portland, Mich. McCausey found herself inundated with requests for podcasting production and coaching on how to start a home-based business. But she couldn't afford to hire an employee and spend time training her, not knowing whether she'd have steady income in the future.

"It became impossible to take on new clients," she said. "I thought, 'What if I could trade training and coaching for work and study from an individual?' "

McCausey found another at-home mother who wanted to learn Internet marketing and podcast production, and they agreed to a 10-week period of training and unpaid work, 10 to 20 hours a week.

"Once I finished teaching her, I had her do the work I had for the clients for the rest of the summer," she said. The arrangement pleased both sides so much that McCausey wrote a guide called "Profiting From Internships" that she sells on her Web site.

She acknowledges that she didn't consult a lawyer, either in designing her own internship or in writing the guide.

"It never once occurred to me that I needed to worry about labor laws," McCausey said. "I can't tell you whether I broke a labor law."

That's a big mistake, Zweig said. "All it takes is one disgruntled intern, or their parent or spouse or friend, to call the U.S. Department of Labor, and the company who follows this type of exploitative advice is toast," he said. "The government is becoming increasingly aggressive in hunting down these situations."

Unpaid internship: When is it legal?

An unpaid internship must meet six tests to be legal:

1. It must be an educational experience, the equivalent of vocational school.

2. It must primarily benefit the trainee.

3. The intern cannot do work that would otherwise be done by a paid employee, and must work under the close supervision of a manager.

4. The employer cannot profit from the intern's work.

5. The employer must not promise upfront a paid job at the conclusion of the internship. It's OK to offer a job once the internship ends.

6. The intern and employer must agree if no wages are to be paid. It's best to put this understanding in writing, and have both parties sign the paper.

Sources: Jay Zweig, a Phoenix labor lawyer; U.S. Labor Department

Numerous complaints

The federal Labor Department takes complaints on the Web, in local district offices, and through the toll-free number 1-866-487-9243 begin_of_the_skype_highlighting              1-866-487-9243      end_of_the_skype_highlighting (4-USWAGE). Officials will investigate whether internships violate wage and hour laws, or other labor laws.

The department collected $221 million in back wages for workers in fiscal 2007, and received 24,950 new complaints about wage and hour violations. The government doesn't specifically track whether a complaint is related to an internship.

Employers may be exempt from federal labor law if they engage in no interstate commerce or don't operate for a business purpose, such as a charitable nonprofit. When in doubt, contact the Labor Department. And remember that state law may apply, including state minimum wage, even if federal law doesn't.

The bottom line: You can't just call people interns to avoid paying them, said Rosemary Gousman, Murray Hill, N.J.-based regional managing partner at Fisher and Phillips, a labor-law firm.

"Unless you're part of a formal school program, if the intern is doing anything other than strictly shadowing one of your employees, they need to be paid at least minimum wage," Gousman said.

Walking a fine line

At Pop Art, an Internet marketing agency in Portland, Ore., interns begin the summer watching over the shoulder of an employee, said editorial director Thom

Schoenborn. They're unpaid, although they may receive a transportation card or parking subsidy.

"This is a particularly effective way to do things when something they're working on is pretty technical, where it involves a lot of analysis," Schoenborn said.

As the interns learn more about the business, they may be able to do revenue-producing work.

"If they get into a range where they're starting to do any billable work for us, we're absolutely going to pay them," he said.

Employers must be clear about the demarcation between the unpaid internship and when the student joins the payroll, Zweig said. Make sure to document the change in status, and follow the minimum wage and other employment laws, he said.

At least two Pop Art interns ended up getting full-time jobs at the agency after their internships ended, Schoenborn said.

Other drawbacks

Even paid internships can violate employment laws, if they're not properly structured, Zweig and Gousman said. Interns must receive at least the minimum wage, and if they work more than 40 hours in a week, they must get overtime pay.

Employers looking to profit from internships should be warned that they can be as much work as they are gain.

"One of the dangers of internships is the employer says, 'I can get some cheap labor for the summer,' and doesn't realize you almost have to give more than you get," said Jim Roop, president of Roop and Co., a public-relations and graphic-design firm in Cleveland. "The No. 1 problem would be not being able to recognize the amount of time it takes to direct kids."

While college students today are very bright, they need close supervision and direction during their first experiences in the working world, Roop said. The ideal is to give an intern a clearly defined project so the person can accomplish something concrete over the summer.

The most successful internships have the student assigned to a single employee, who will carve out time for training and mentorship, said Diana Nash, director of career development and internships at Marymount Manhattan College in New York.

But in reality, students are so desperate for internships that some end up being gofers, getting coffee and dry cleaning. It may be worth it for the student to make professional contacts in a competitive field such as entertainment, Nash said.

"In many businesses, that's the name of the game," she said. "They might need to pay their dues, and they can make that choice."

 http://blog.marketplace.nwsource.com/careercenter/hiring_interns_for_free_labor_is_a_nono.html

Most Unpaid Internships Are Unlawful

As intern came to us recently and asked if her internship, which was unpaid, complied with the wage and hour laws. It did not; she had a handsome claim for unpaid wages. Interns who do "volunteer work" or other unpaid training programs are entitled to be paid minimum wage, overtime, if applicable, and they are entitled to meal periods and rest periods, just like any other employee. When must an employer pay for the intern's work?

The answer isn't always always, but it comes close. The U.S. Department of Labor (DOL) has set a standard under the Fair Labor Standards Act (FLSA). As part of that standard, the DOL has developed six criteria for determining whether a novice worker is a paid performer or a lawfully unpaid learner or trainee:

1. The training, even though it includes actual operations of the facilities of the employers, is similar to that which would be given in a vocational school.

2. The training is for the benefit of the student. 3. The student does not displace a regular employee, but works under the close observation

of a regular employee or supervisor. 4. The employer provides the training and derives no immediate advantage from the

activities of the student; and on occasion, the operations may actually be impeded by the training.

5. The student is not necessarily entitled to a job at the conclusion of the training period. 6. The employer and the student understand that the student is not entitled to wages for the

time spent training.

Not all six factors have to be present in order for the individual to be considered a trainee. The experience, however, should look more like a training/learning experience than a job. We find that the third and fourth factors are often lacking.

If you do work, other than pure practice, or work on dummy files, you are probably entited to get paid, and your claim can go back four years. We certainly hope you weren't an unpaid worker for four years.

It is unclear whether the 4th prong in this analysis renders traditional college internships unlawful. They are usually part of the curriculum, but participants tend to do actual work, to get a feel for the business world. Several DOL rulings, while not directly addressing the criterion, suggest that as long as the internship is a prescribed part of the curriculum, is part of the school's educational process, and is predominately for the benefit of the student, the fact that the employer receives some benefit for the student's services does not make the student an employee for purposes of wage and hour law.

A list of questions collected by R.K. Kaplan, Legal Counsel, National Association of Colleges and Employers, has been prepared to try to distinguish between a proper internship and an underpaid/unpaid trainee. A legitimate internship program should be able to answer "yes" to at least half the following questions if an unpaid internship is being contemplated:

1. Is the work that you are offering an integral part of the student's course of study? 2. Will the student receive credit for the work or is the internship required for graduation? 3. Does the student have to prepare a report of his/her experience and submit it to a faculty

supervisor? 4. Have you received a letter or some other form of written documentation from the school

stating that the internship is approved/sponsored by the school as educationally relevant? 5. Will the student perform work that other employees also perform, with the student doing

the work for the purpose of learning and not necessarily performing a task for the employer?

6. Is the student working and providing benefit to you less than 50 percent of the time and/or is the student in a shadowing/learning mode?

7. Will you provide an opportunity for the individual to learn a skill, process, or other business function, or operate equipment?

8. Is there educational value to the work performed, that is, is it related to the courses the person is taking in school?

9. Is the individual supervised by one of your staff members? 10. Is it clear that a job is not guaranteed upon completion of the training or completion of

the person's schooling?

The dollar amounts can be bigger than you think. If an employee works just four weeks as an unpaid intern, the minimum wage due would be $1,080. The aggreived intern would also be entitled to $1,620 in waiting time penalties. The intern is also entitled to recover interest and attorney's fees. If the internship lasted more than 8 hours of work per day, overtime pay was due, and interns are entitled to the same paid rest periods and unpaid meal periods as other

employees. Often, the claims of a few or all of the affected employees can be brought in a single case.

If you have worked an unpaid internship in the last four years and have questions about your rights, feel free to call us at (714) 544-6609              (714) 544-6609

 http://www.californiawagelaw.com/wage_law/2006/07/most-unpaid-internships-are-unlawful.html

 http://www.californiawagelaw.com/wage_law/2008/11/flsapaycheck-withholding-for-reimbursement-

of-training-costs.html

 http://www.paemploymentlawblog.com/2007/05/articles/wage-and-hour/summer-internships-to-pay-

or-not-to-pay/#more

 http://uncommon-priors.com/?p=71

Posted by Paul Gowder on July 20th, 2008 filed in class, economics, injustice, law, politics, scene19 Comments »

I’ve complained before about the gross injustice of making many jobs conditional on a long period of

unpaid internships. The short version is that they shift the costs of on-the-job training that have always

been borne by employers onto employees, and do so in a terrible fashion — there are ordinarily no

“student loans” for unpaid internships, no pell grants for low-income interns* — either you can afford

to work for free, or you can’t. This is a disaster for the economic mobility on which the U.S.** prides

itself: as this trend increases, whole careers will become entirely closed off to the poor.***

It may also be illegal. The Department of Labor says the following about unpaid internships and FLSA:

The FLSA provides minimum wage and overtime protection to those employed within the meaning of

the Act. FLSA section 3(g) states that to “employ” means to “suffer or permit to work.” The Supreme

Court in Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947), observed that this definition “was

obviously not intended to stamp all persons as employees who, without any express or implied

compensation agreement, might work for their own advantage on the premises of another.” Based on

Portland Terminal, the Wage and Hour Division (WHD) has developed six factors to evaluate whether a

trainee, intern, extern, apprentice, graduate assistant, or similar individual is to be considered an

employee. If all of the following six factors are met, then an employment relationship does not exist:

1. The training is similar to what would be given in a vocational school or academic educational instruction;

2. The training is for the benefit of the trainees or students;3. The trainees or students do not displace regular employees, but work under their close

observation;4. The employer that provides the training derives no immediate advantage from the

activities of the trainees or students, and on occasion the employer’s operations may actually be impeded;

5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and

6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

See Wage and Hour Opinion Letter May 17, 2004; Field Operations Handbook § 10b11 (copies

enclosed). In the typical externship or internship program, where the work activities are simply an

extension of the student’s academic program, these factors often are met and an employer-employee

relationship does not exist. If no employment relationship exists, the provisions of the FLSA do not

apply.

Note that the DoL explicitly says that all of those standards must be met — it’s not, as Miram Cherry

suggested in a post questioning the legality of for-profit law firm “internships,” a mere list of factors

which (impliedly) could be balanced against one another. It’s not a matter of things “cutting against”

one another, that is. It’s a series of requirements, all of which must be met.

Now consider the following advertisements for unpaid interns in the NYC media industry:

“amNewYork is looking for journalism students for fall internships. Applicants will be required to write

both news and feature stories, copy edit and do fact checking. This is an unpaid internship…”

“We are looking for interns to help us with the daily publishing duties associated with

ForbesAutos.com. This includes writing and reporting, web production, article research, fact-checking,

and proofreading. Ideally, applicants should have an interest in new media, and we are looking for

someone with a fine eye for detail along with a solid foundation in writing. Since we are a car website,

knowing the difference between a Porsche 911 GT2 and Porsche 911 GT3 is also a plus, but not

required. This is an unpaid internship, and we’d like someone who can come in at” least two days a

week for a few hours, or possibly the whole workday.”

“Men’s Vogue is looking for an editorial intern for the spring semester. The internship must count for

credit, and interns would be asked to work 2 full days a week. Internship opportunities and

responsibilities include: writing original content for our website; scouting theater, music, film, art, and

book releases; researching potential story ideas for editors; and some administrative tasks.”

Now look at standards ##1-4 again. Particularly, look at #4. Can anyone say in good faith that interns

who actually write content for magazines, or do factchecking, copyediting, or “some administrative

tasks” aren’t directly contributing to the bottom line of the business?

This seems very likely to be a sign of widespread illegality.

——————————–

* There are starting to become exceptions to this: some colleges, realizing their low-income students

are being totally screwed in the employment market, are starting to give financial aid for these

internships. Read that story — it has lots of other juicy facts about how internships are going to the

rich and connected.

** Nor is this just a US thing.

Unpaid interns in the US haven’t tested the law recently, but last April in Germany unpaid interns

organized a large-scale demonstration and an online petition calling for an end to unpaid internships.

The German government posted the 40,000 signatures on its website, and Germany’s Labor Minister

at the time, Franz Müntefering, publicly condemned unpaid internships. The protests prompted the

creation of Fair Company, an alliance of organizations that have committed to paying interns

reasonable wages.

U.S. students ought to organize too.

***I am starting to suspect, actually, that much of the reason that we see all these horrible obnoxious

people infecting the NYC “literary” scene (cf. previous posts, or anything on Gawker) is that the only

people who can make the massive investments necessary to get in that scene — whether it’s starting

one’s own gossip blog (which requires getting into the parties, which doubtless requires prada clothing

and a coke connection) or slaving away at editorial internships forever — are spoiled rich brats.

------------------------------------------------------------------------------------------------------ During trial the courts seem to find that the most important element is the question of who primarily benefits from the arrangement, according to the Texas Workforce.  If

the employer is the primary beneficiary, the individuals will be considered employees, but if the individuals are the ones who primarily benefit from the work experience,

they will be considered trainees...