The Legality of Internships: Free Labor or Valuable Learning Opportunity?

Monday, March 19, 2012

Leonardo Angiulo, GoLocalWorcester Legal Expert

Leonardo Angiulo, GoLocalWorcester Legal Contributor

Most people agree that school doesn’t teach you much about what goes on in the real world or what it really means to work in a given field. No matter what kind of work you want to do, there is no replacement for hands on experience. I know that internships played a big part in my education. I would suggest that anyone who wants to really learn about a profession spend some time outside the classroom to supplement their book smarts. During the coming weeks and months there will be many high school, college and post-college students looking for their opportunity in an increasingly tight market.

Every year there are a few generous people out there who make room in their business for young people to come in and learn a thing or two about the working world. Sometimes, these businesses provide a stipend for these young people so they have some money at the end of the summer. More often than not, however, the experience provided and the mentorship opportunities are the only compensation.

Like I said, some of the hours I spent in internships helped me more than months I spent in class. The trouble comes when the federal government might decide that an intern is actually an employee. To figure out how your situation will be defined, I suggest calling a lawyer who specializes in employment law. I called Attorney David Grossi with the firm of Bowditch & Dewey here in Worcester when I was investigating these issues.

The U.S. Department of Labor published Fact Sheet #71 in April of 2010 and it is available online. Its stated purpose is to help determine whether interns must be paid the minimum wage and overtime under the Fair Labor Standards Act for the services they provide to “for-profit” private sector employers. What this very roughly breaks down to is if you are not a public entity or a charity then you are a private business operating with the goal of making money. If you bring someone into your business and they contribute to the money making efforts of your business, that person must be paid minimum wage with overtime compensation for hours worked over forty in a work week. Whether you call them an intern doesn’t necessarily change your obligations under the law to compensate them.

Like everything else in the law, there are exceptions to this rule. If a person is at a business for their own educational benefit, and a few other pieces fall into place, then an intern will not need to be paid. If you want to read the six factors that the Feds will consider, I suggest reviewing the fact sheet. The gist of it is if a person is really learning something from their time with your company, doesn’t expect a job at the end of the internship and you’re not otherwise using the intern as free labor you might be on the right side of the law.

At this point, you might be wondering why I’m making such a big deal about this. You might be saying to yourself, “Who cares if I bring someone on for the summer and I don’t pay them minimum wage.” The answer is that the Department of Labor cares very much. In fact, investigating and enforcing the Fair Labor Standards Act of 1938 is what they do. So, if you get investigated and they determine that you have been ignoring their guidelines you can face fines, criminal charges and might even be looking at incarceration.

Most people who try to help students by offering an internship aren’t looking to get something for nothing and aren’t trying to break the law. Importantly, the Department of Labor will apply their six factors in those circumstances where an intern is at a business for their own educational benefit. If you are really interested in helping young people learn and gain experience, reach out to the internship coordinator at your school of choice. I’m sure they have a list of people waiting to hear from you.