What are the legal risks of not paying interns? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

What are the legal risks of not paying interns?

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Q. For years, we have used student interns during the summer months. Because they are interns, we do not pay for their services. Is this legal?

A. If you are a for-profit business, you are taking a huge risk by not paying these interns. Before an employer can legally refuse to pay an intern, all six of the following factors must be met:

  1. Is the training similar to what would be given in a vocational school or academic educational instruction?
  2. Is the training for the benefit of the trainees or students?
  3. Do the trainees or students work under close observation of regular employees without displacing them?
  4. Does the employer derive no immediate advantage from the activities of the trainees or students, and on occasion are the employer’s operations actually impeded?
  5. Are the trainees or students not necessarily entitled to a job at the conclusion of the training period?
  6. Do the employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training?

Most internships in the for-profit sector will fail this test, and most workers that employers view as “interns” are, in fact, employees who must be paid for their services.

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