Summer is Coming, and So Are Intern Misclassifications

Internships can be one of the most beneficial learning experiences of a young person’s life, providing skills and experience employee misclassificationunattainable in any classroom. However, some are trying to argue that these benefits mean more interns should go without payment for their work.

The U.S. Labor Department recently released a new set of guidelines that relaxes the requirements around paid internships. According to a Los Angeles Times report, the new guidelines do keep intact a series of factors companies should use to determine whether they have to pay their interns or not, referred to as a primary beneficiary test. In other words, the test determines who benefits the most from the internship: the intern or the company. But now instead of using these factors as the standard by which to judge the employer’s final decision, the merits will be determined on a case-by-case basis.One of the most contentious of the criteria was the rule that an intern should be paid if the company received “immediate advantage from the activities of the intern.” This point was central to several lawsuits where companies were ordered to pay unpaid interns because their work was considered advantageous to the business they were working for. Some complained that this point was too vague. It has now been more clearly defined to say that the work of an unpaid intern “complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.” When an intern’s work displaces that of a paid employee, the intern essentially becomes a temporary employee. The Fair Labor Standards Act requires employees be paid for their work, thus this type of intern also is required to receive compensation.

However, with this clearer distinction also came the removal of clear enforcement.

Our experienced employee misclassification attorneys in Orange County have seen this tactic before. This rule was intended to protect interns from employers who want to abuse a free labor force to do the work of full-time paid staffers. It’s clear to see who benefits most when we expand the number of cases where a company could get by without paying interns. 

Ideally, internships allow people to take their abstract educations and apply what they have learned in real work environments. They are seen as such an important learning experience, that internship programs are often managed in conjunction with universities as part of required curriculum for graduation. They also provide considerable value to the company hosting the interns as they can train a new generation of potential employees and give an inexperienced, but promising, new face a try before committing to hiring them full time.

To this effect, both intern and employee benefit from this relationship. Rarely is an internship provided purely out of the goodness of someone’s heart with no benefit to themselves. And when it is, the intent is clear. Now that the Department of Labor’s primary beneficiary test has become more flexible, it is more important than ever for skilled employment attorneys like ours to act as a watchdog for interns who might be taken advantage of by companies trying to cut costs. If you feel your unpaid internship required you to perform the work of a full-time employee, our team can help build your case and defend your right to proper compensation.

Additional Resources:

Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act, January 2018, United States Department of Labor

More Blog Entries:

California Internship Lawsuits: Blaming the Victim, Oct. 28, 2013, Orange County Employment Lawyers Blog