Summer is almost here and college students are competing for internships, hoping to build their resumes. Luckily for them, and surely as a result of the current economy, more and more companies are establishing internship programs. Unpaid internship programs.
Are they legal?
Yes, but only if the internship program complies with criteria established by the federal government. If it does not comply, the labor laws may be violated and companies can be held liable for unpaid wages, fines and penalties. In other words, the Department of Labor can require employers to compensate current (and former) interns for their time worked for the company.
An internship may be unpaid if all of the following factors are present:
• The training is similar to that available in a school.
• The internship is mainly for the student’s benefit rather than for the company’s benefit.
• The intern does not displace a company employee (and instead works under their supervision).
• There is no guarantee of a job at the end of the internship.
• Both the intern and the company understand that the internship is unpaid.
In short, unpaid interns must be learning from the internship and cannot be exploited as grunts. While many interns may be fearful of complaining about the internship or simply ignorant of their rights, the federal Department of Labor is cracking down on employers using interns as free labor. Before the Department of Labor investigates internship programs, employers are well advised to consult with employment counsel to find out if your program would pass muster with the government.