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Unpaid Internships: Free Today . . . Costly Tomorrow - includes Video

 With the summer season approaching, college and high school students will be looking for opportunities to improve their resumes and gain valuable experience. The prospect of hiring a talented student - or someone transitioning between careers - who is willing to work for free is enticing to many employers.

In many cases, however, the unpaid aspect of the internship violates the Fair Labor Standards Act (FLSA). Lawsuits by unpaid interns to recover wages, including liquidated damages and attorney's fees, although still uncommon, are on the rise.

Unpaid internship programs can be an appropriate method of providing training if they are designed properly and are primarily for the benefit of the intern and not the employer. However, to paraphrase this week's Time magazine article titled "Hard Labor: Inside the Mounting Backlash Against Unpaid Internships," employers are not entitled to free labor just because they slap the title "intern" on the position.

The U.S. Department of Labor uses the six criteria below to determine whether an unpaid internship falls outside the employment context covered by the FLSA.

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

We recommend that you evaluate your internship programs against these six criteria prior to extending offers of unpaid employment to prospective interns. Interns are unlikely to be exempt employees under the FLSA. As a result, if your internship program does not meet all six criteria, you should plan to pay interns at least minimum wage, currently $7.67 in Florida, and, when necessary, the applicable overtime rate for hours worked over 40 in a work week.

Rachel D. Gebaide and Melody B. Lynch of Lowndes, Drosdick, Doster, Kantor & Reed, P.A. discuss the pros and cons of unpaid internships and what employers should watch out for.

© Lowndes, Drosdick, Doster, Kantor & Reed, PA, 2016. All rights reserved.

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About this Author

Rachel Gebaide, labor, employment, attorney, Lowndes, law firm
Partner

Rachel D. Gebaide is a Partner in the firm and Chair of the Labor and Employment Law practice. Ms. Gebaide represents employers in federal and state courts and before administrative agencies in all matters pertaining to employment law including, without limitation, claims arising under Title VII, Age Discrimination in Employment Act (ADEA), Americans with Disabilities Act (ADA), Family and Medical Leave Act (FMLA), Uniformed Services Employment and Reemployment Rights Act (USERRA), Worker Adjustment and Retraining Notification Act (WARN), and the Fair Labor Standards Act (FLSA).

Ms...

407-418-6286
Melody Lynch, labor, employment, sports, entertainment, attorney, Lowndes
Associate

Melody Lynch divides her work among the Labor and Employment, Commercial Litigation, eDiscovery, and Sports and Entertainment practices. She has worked on matters involving Title VII, Fair Labor Standards Act, Family and Medical Leave Act, whistleblower laws and disputes over employment contracts, non-competition agreements, and non-disclosure agreements. Melody represents employers before state and federal courts, as well as before administrative agencies including the Equal Employment Opportunity Commission, the Florida Commission on Human Relations, and the Department of Labor.

Melody also regularly represents clients in complex business and real estate disputes, including representation of large luxury hotels with regard to various contract and collection matters.

Melody is a founding member of the firm's eDiscovery practice and is a frequent author and lecturer on the topics of eDiscovery, workplace privacy, and technology. She litigates complex cases involving voluminous amounts of electronically stored information and manages document preservation, collection and production effort including drafting the litigation hold letter, designing the review platform, and through the conclusion of trial. In addition, Melody assists clients in preparing document retention and destruction policies in advance of litigation.

In the sports law arena, Melody has handled contract disputes and family law cases involving athletes in the National Basketball Association, National Football League and Major League Baseball.

407-418-6447