The short answer; probably.
We have seen a number of stories recently about interns suing companies who did not pay them during their internships.
It’s safe to assume that as more and more unpaid interns hear about the lawsuits, they could jump on the bandwagon. While an intern does not always need to be paid, a business could waste lots of time and money fighting such a case.
Congress is getting involved too. Three separate bills have been proposed in the past month to prevent workplace discrimination against unpaid interns.
My advice would be to pay interns, even if it means decreased numbers or decreased hours of interns, rather than risk potential lawsuits or penalties. But you still can have unpaid internships, and the U.S. Department of Labor has a six question test to determine if an internship can be unpaid. If all of the following criteria are met, the intern does not need to be treated as an employee, and does not need to be paid.
- 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.
So, to summarize, if you would like to have unpaid internships you will need to make sure the internship training is similar to school training, has a direct benefit to the intern, does not replace the work of an existing employee, the employer cannot derive an advantage, does not entitle the intern to employment, and the intern must be fully aware that they will not receive wages.
Most internships that I have seen would not satisfy all of these 6 criteria. Even if all criteria were met, it might still be in the best interest of the business to pay minimum wage to any interns to avoid issues and also because it’s simply the right thing to do.
For more information about whether or not to pay interns, please reach out to Genesis HR Solutions at AskUs@genesishrsolutions.com or 800-367-8367.
Genesis HR Solutions is the premier PEO provider for Massachusetts based businesses.
