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New Department of Labor Guidelines on Internships

How to Decide if an Internship Needs to be Paid or Not


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The recently issued New Federal Guidelines on Internships could affect the number of internships companies offer in the future. Based on the Fair Labor Standards Act (FLSA), which was created to ensure that all workers be paid at least a fair minimum wage, the federal government is now cracking down on unpaid internships to discourage employers from the practice of having interns work for free.

According to The Department of Labor, the following six legal criteria must be applied when making a determination if an internship is required to be paid.

  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.
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

In the past, unpaid internships have become a common practice amongst companies. In order for an internship to be academic worthy, students doing internships in conjunction with their college coursework are expected to gain hands-on experience that helps them develop the knowledge and skills required to gain entry into their field. The New Guidelines could affect the quality of internships since one of the criteria states the employer derives no immediate advantage from the activities of the intern.

The distinction that the New Guidelines are looking to enforce is that internships are for educational training rather than having interns do the work of regular employees. Many employers spend considerable time training and mentoring their interns and do not derive much benefit from having them complete an internship with the organization. While other organizations expect interns to jump right in and do the same work as a regular employee. An unfortunate result of strict adherence to the New Guidelines and in interpreting the issue of the legality of unpaid internships could make it more difficult for students to find internships in the future.

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