Litigation

If you are thinking about hiring unpaid interns, think again

By Stacey Mark

With summer fast approaching, you may be considering hiring students or others as unpaid interns.  While students and displaced workers may be grateful for the opportunity to gain experience and willing to work without pay, most employers should resist the temptation to take advantage of the "free" labor.  If your business derives a benefit from the work an intern performs, he or she will most likely qualify as an employee and must be paid at least minimum wage.

A recent article on OregonLive.com illustrates the point.  The article recounts the stories of summer interns on whose behalf the Oregon Bureau of Labor and Industries (BOLI) pursued wage claims against the companies that the provided the internships.  In all cases, the interns prevailed.

Although there is no bright-line test for determining when an internship does or does not qualify as employment, the Department of Labor and BOLI both rely on the following six factors, first announced by the U.S. Supreme Court in Walling v. Portland Terminal Co., 330 US 148 (1947):

1. 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;
2. The training is for the benefit of the trainees or students;
3. The trainees or students do not displce regular employees, but work under their close supervision;
4. The employer that provides the training derives no immediate benefit from the activities of the trainees or students; and on occasion its operation may actually be impeded;
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

All of the foregoing factors must be met for the person to qualify as an unpaid intern.  For a more detailed explanation of the type of program that will qualify as an unpaid internship, see BOLI Technical Assistance FAQ on Interns and Trainees. 

Full post as published by Northwest Business Litigation Blog on April 23, 2010 (boomark / email).