Unpaid internships could be very expensive for employers

by on
in Compensation and Benefits,Human Resources

by Jamie N. Rotteveel, Esq., Pepper Hamilton LLP, Philadelphia

Over the past year, unpaid internships have received increasing attention. By some estimates, more than a million people participate in internships each year in the United States, as many as half of them unpaid or for less than the minimum wage.

That can be a problem for em­­ployers: Misclassifying employees as unpaid interns can result in costly litigation, civil fines or both.

The Fair Labor Standards Act (FLSA) requires paying the minimum wage and overtime to nonexempt employees. However, the FLSA allows for-profit, private-sector employers to hire individuals for internships or training programs without compensation as long as the internship is primarily for the interns’ educational benefit.

DOL’s 6-part internship test

Because the FLSA’s definition of “employ” ( “to suffer or permit to work”) is extremely broad, most workers are considered employees and the ...(register to read more)

To read the rest of this article you must first register with your email address.

Email Address:

Leave a Comment