‘Tis the Season for Unpaid Internships (Or Not!)

Second Quarter 2012Articles California Update

Summer is officially here, with plenty of high school and college students and recent graduates looking for resume-building work experiences. Before you bring on any unpaid interns this summer – beware. There is no California state statute or regulation that expressly exempts persons participating in an internship from the minimum wage and overtime requirements. Whether an intern should be classified as an “employee” is subject to a case by case analysis of the circumstances. The Division of Labor Standards Enforcement’s (DLSE) opinion letter on the subject can be found online.

While counterintuitive, interns are not supposed to really be helpful to your business; rather they are supposed to learn from you. As the Department of Labor (DOL) puts it, an employer is not supposed to derive any immediate advantage from the intern, and they cannot displace your regular employees. Also, while California’s DLSE still suggests that an intern be part of some accredited school program, that one fact alone is certainly not sufficient to qualify someone for intern status. There has been a recent flurry of lawsuits by interns claiming to be misclassified and seeking unpaid wages, particularly in the entertainment and publishing industries.

By the way, nothing prevents an employer from calling someone an “intern,” hiring them for a limited period of time and paying that person minimum wage. In fact, that is often a very viable option.

Bottom line: just because everyone else does it, and has done it for years without getting sued, does not make it okay. It certainly won’t protect your company from being the next class action headline.