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To pay or not to pay summer interns

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in Employee Benefits Program,Hiring,Human Resources

Q. Our company is considering hiring student interns this summer. Are we required to pay them under California law?

In general, interns are workers not on the employer’s payroll who are involved in a training program. Whether interns must be paid for their time depends upon whether they are considered to be “employees.”

California’s Division of Labor Standards Enforcement (DLSE) has indicated that the following requirements should be met to avoid a finding under state law that an employment relationship exists:

  • The clinical training is part of an educational curriculum.
  • The intern does not receive employee benefits.
  • The training is for the benefit of the intern.
  • The intern does not replace regular employees, but works under their close supervision.
  • The employer derives no immediate advantage from the activities of the intern, and on occasion the employer’s operations may actually be impeded.
  • The employer and intern understand that the intern is not entitled to wages for the time spent in training.
  • The training is general and intended to prepare the intern for work in any similar business (not only for a job with this employer).
  • Upon completion of the training, the intern requires further training to be eligible for a job with this employer.
  • The screening process for the training is different than the process used for employment.
  • Advertisements for the training program clarify that the program is for educational purposes.

California employers should evaluate these requirements (plus those established by the U.S. Department of Labor’s Wage and Hour Division) before determining whether they are establishing an employment relationship.

Employers considering using interns may submit a description of the training program to the DLSE and request a ruling. The agency will tell you whether, under the facts you provide, your interns are employees or true interns who don’t have to be paid.

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