Making Sure Your Unpaid Interns Are Not Considered Employees

Third Quarter 2010Newsletters California Update Employment Law

California employers that have unpaid interns should take note of an opinion letter issued by the California Division of Labor Standards Enforcement on April 7, 2010. The DLSE looked to federal law, and in the opinion letter, set forth the criteria it uses to determine whether an unpaid intern is an "employee" for purposes of California's minimum wage law. The following is the DLSE's six-part test:

  1. The training, even though it includes actual operation of the employer's facilities, is similar to that which would be given in a vocational school;
  2. The training is for the benefit of the students or trainees;
  3. The students or trainees do not displace regular employees, but work under their close supervision;
  4. The employer gains no immediate advantage from the activities of the students or trainees, and on occasion, the employer's operations may be actually impeded;
  5. The students or trainees are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the students or trainees all understand that the students or trainees are not entitled to wages for time spent in training.

Unless these requirements are met, the law requires that the individual be paid. The opinion letter can be found at: www.dir.ca.gov/dlse/opinions/2010-04-07.pdf.