Compliance Tips For Unpaid Internships

Compliance Tips For Unpaid Internships

Unpaid internships are an opportunity for companies to scout promising talent while helping them gain the experience they’ll need to effectively function in their departments. At the same time, there are some rules and regulations which must be adhered to when working with them, most of which are related to time and wages.

Penalties For Violating Internship Rules

If you violate any of the regulations which are related to internships which are unpaid, you would put yourself at risk of being held liable for overtime or unpaid salaries. You may also be required to provide the benefits which are normally given to employees. Worst of all are the fees that you would be forced to pay. If you are uncertain of whether or not your internship meets the requirements which are stipulated by the Department of Labor, it is best to speak with a legal team. This issue is taken seriously so that interns are protected from abuse. After all, the law states that actual employees must be paid a minimum salary plus overtime for any time they work which exceeds 40 hours per week.

Department of Labor Rules Regarding Unpaid Internships

There are six requirements that a non-profit internship must meet in order to be permissible under the Department of Labor. First, the company must not gain an immediate benefit from their training and functions. Second, the internships must be designed solely for the benefit for the intern. Third, the intern is not guaranteed of a job once the internship has been completed.

The intern must not replace any of the existing employees, and they must be managed by current staff. The internship is akin to training, which is primarily educational in nature, and both the employer and intern understand that under no circumstances will the intern receive a salary.

Non Profit And Public Sector Exceptions

Depending on the sector in which your company operates, interns may be given more responsibilities. The U.S. Department of Labor has stated that internships which are unpaid in charitable institutions or the public sector, where the intern can volunteer without earning a salary, are typically allowed.

College Credit Alone Is Not Sufficient

Many college students like internships because it gives them opportunities to acquire credits for their classes. However, even if the school considers the internship eligible for credits this does not mean the program should be designated as unpaid. A court ruling at the federal level has found that acquiring academic credits alone was not sufficient for an internship which is unpaid to be legal. In fact, the Department of Labor has stated that internships which are designed for academic experiences, as opposed to the operations of an employer are likely to be viewed as additional education.

Interns who perform productive tasks like filing or other business functions should not be excluded from the overtime and minimum wage requirements of the FLSA since the employer would be technically benefiting from their work.