Lawsuits involving interns suing for unpaid wages and overtime have been all over the news in the last year. Many companies have internship programs which are intended to allow high school, college or graduate students (and others) to spend time learning about an industry and gaining hands-on experience related to their course of study or intended profession. Interns or trainees are not considered to be employees under the wage and hour laws. However, just calling someone an “intern” or a program a “training program” is not enough to avoid paying minimum wage and overtime. The Department of Labor has specific criteria for unpaid interns/trainees, and current litigation arises from allegations that the companies involved did not satisfy the criteria.
According to the DOL, a trainee or intern will not be an employee if:
- The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
- The training is for the benefit of the trainees or students;
- The trainees or students do not displace regular employees, but work under their close supervision;
- The employer that provides the training derives no immediate advantage from the activities of the trainees or students; and on occasion his operations may actually be impeded;
- The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
- The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.
On the other hand, a trainee or intern will be an employee if:
- They provide essential services to the employer; or
- They are working in a position where someone is normally paid; or
- There is a history of paying someone to do the same or similar work; or
- Other people are currently paid for the same or similar work.
There are only a few limited circumstances in which Federal and Oregon law permit people to work for free. In the context of internships or training programs, companies must carefully follow the criteria set by the DOL or risk liability for unpaid wages and overtime. http://www.oregon.gov/boli/TA/pages/t_faq_interns.aspx