Lana Oconnell
Internships are a great way for students to gain on-the-job experience and explore a career path. Traditionally, internships are unpaid, with interns receiving college credits, resume boosts, and valuable experience in return for their work. However, this has led to concerns that businesses are taking advantage of interns by having them do the job of an employee without providing the benefits and protections that employees receive under the Fair Labor Standards Act (FLSA). So, do student interns count as employees? The answer depends on the specific circumstances of each case and the unique laws of the location.
| Characteristics | Values |
|---|---|
| Interns and students may not be "employees" under the FLSA | For-profit employers must pay employees for their work as per the FLSA |
| Unpaid internships are permissible for public sector and non-profit charitable organizations | Unpaid internships are viewed as providing valuable experience and helping interns improve their chances of landing a job in that profession |
| Internships are usually short-term arrangements | Interns are not as qualified as employees and require ongoing training and instruction |
| Interns are not entitled to wages for the time spent in the internship | If an internship benefits only the intern and not the person providing the training, the intern is generally not classified as an employee |
| Internships are structured around a classroom or academic experience | Internships are similar to training given in an educational environment |
| Interns are not entitled to a job at the conclusion of the internship | The internship experience is for the benefit of the intern |
| In some states, both paid and unpaid internships legally count as employment |
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What You'll Learn
Internships are often unpaid, but is this legal?
The Fair Labor Standards Act (FLSA) requires for-profit employers to pay employees for their work. However, interns and students may not be considered "employees" under the FLSA, in which case they are not entitled to minimum wage or overtime pay. To determine whether an intern is an employee, courts use the "primary beneficiary test," which examines the "'economic reality' of the relationship. This test includes factors such as whether there is an expectation of compensation, whether the internship provides training similar to an educational environment, and whether the internship is tied to the intern's formal education program.
Unpaid internships for public sector and non-profit charitable organizations are generally permissible, as long as there is no expectation of compensation. However, some states legally consider internships, both paid and unpaid, as employment, providing interns with legal protections and benefits such as workers' compensation.
While unpaid internships can provide valuable experience and help students explore different career paths, they can also create a vicious cycle, benefiting students who are already economically advantaged. Additionally, employers may find that the quality of talent in paid internships is higher, as interns are more motivated and committed when they are compensated for their work.
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What are the criteria for classifying interns as employees?
Whether an intern is considered an employee or not depends on several factors. The Fair Labor Standards Act (FLSA) requires "for-profit" employers to pay employees for their work. However, interns and students may not be considered "employees" under the FLSA, and therefore, they may not be entitled to compensation. Courts have used the "primary beneficiary test" to determine whether an intern or student qualifies as an employee under the FLSA. This test examines the "'economic reality' of the intern-employer relationship to determine which party benefits more from the arrangement.
The Department of Labor has outlined six criteria to determine whether an intern is classified as an employee:
- The internship provides training similar to that in an educational environment, including hands-on training.
- The internship primarily benefits the intern, helping them gain valuable experience and skills for their future career.
- The intern works under the close supervision of existing staff and does not replace regular employees.
- The employer does not derive immediate advantage from the intern's activities and may even experience impeded operations due to the time and resources invested in training.
- There is no expectation of compensation for the intern, and no promise of payment is made, either expressly or implicitly.
- The internship does not guarantee a paid job opportunity at the end of the program.
Additionally, some states in the US legally recognize both paid and unpaid internships as employment, providing interns with increased legal protections and access to benefits such as workers' compensation and unemployment benefits.
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What are the benefits of internships?
Whether student interns count as employees depends on the unique circumstances of each case. If an internship benefits only the intern, and not the person providing training, the intern is generally not classified as an employee.
Now, here are the benefits of internships:
Internships are a great way for students and recent graduates to gain on-the-job experience before pursuing a career. They are usually short-term arrangements, such as during a school term, summer vacation, or for the duration of a professional project. Internships can be paid or unpaid, and in some states, both types legally count as employment, providing increased legal protections and benefits. Paid internships can help interns cover expenses and even save money for college or other expenses. Unpaid internships, though less attractive due to the lack of financial compensation, still offer valuable experience and networking opportunities.
Internships provide career preparation that extends beyond the conventional classroom, helping to bridge the gap between academic theories and real-world practices. They offer hands-on experience in a professional environment, enabling students to translate classroom knowledge into practical skills. Interns gain insight into the daily operations and challenges of their chosen industry, equipping them with experience and confidence. These experiences are indispensable to personal and professional growth, providing a competitive edge in the job market and helping students make informed career decisions.
In addition to gaining practical skills, interns have the opportunity to develop soft skills such as verbal communication, problem-solving, and empathy in a completely different setting. Internships also provide a platform for networking and mentorship, which can be beneficial for future career opportunities and provide valuable feedback during the transition to full-time employment.
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Are interns entitled to a job at the end of their internship?
Internships are usually short-term opportunities for students or recent graduates to gain experience in a specific field. They are often unpaid, and interns are generally not classified as employees. However, some internships do provide wages and benefits, and in some states, both paid and unpaid internships are legally considered employment, granting interns legal protections and benefits such as workers' compensation.
Whether an intern is considered an employee under the Fair Labor Standards Act (FLSA) depends on the specific circumstances. The FLSA requires for-profit employers to pay employees for their work, but interns and students may not be classified as employees and therefore may not be entitled to compensation. Courts use the "primary beneficiary test" to determine the economic reality of the intern-employer relationship and identify which party benefits more from it. This test considers factors such as the extent to which the internship is similar to an educational training environment, whether the intern displaces regular employees, and whether the employer derives immediate advantage from the intern's activities.
While interns are not necessarily entitled to a job at the conclusion of their internship, there are steps interns can take to increase their chances of being hired. These include communicating their goals and intentions to their supervisor and human resources representative, networking with other managers and employees within the company, and developing relationships with mentors and advisors. Performing at a high level and delivering great work can also enhance an intern's chances of being hired.
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Are interns entitled to the same wages and benefits as employees?
Whether interns are entitled to the same wages and benefits as employees depends on the unique circumstances of each case. The Fair Labor Standards Act (FLSA) requires "for-profit" employers to pay employees for their work. However, interns and students may not be considered "employees" under the FLSA, in which case the Act's minimum wage and overtime provisions do not apply to them.
To determine whether an intern is an employee under the FLSA, courts have used the "primary beneficiary test" to examine the "economic reality" of the intern-employer relationship. This test involves considering several factors, including the extent to which there is an understanding between the intern and the employer that there is no expectation of compensation and that the internship is conducted without entitlement to a paid job at the conclusion.
Additionally, the Department of Labor has issued criteria to help determine whether an intern is a trainee or an employee. These criteria include considering whether the internship is similar to training that would be given in an educational environment, whether the internship benefits the intern, whether the intern works under the supervision of existing staff without displacing regular employees, and whether the employer derives immediate advantage from the intern's activities.
In some states, both paid and unpaid internships legally count as employment, providing interns with increased legal protections and access to benefits such as workers' compensation and unemployment benefits. Paid internships may also help interns cover expenses and save money, but they may not provide the same wages and benefits as full-time employment. Ultimately, the determination of whether an intern is entitled to the same wages and benefits as an employee depends on the specific circumstances and the applicable laws and regulations in each jurisdiction.
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Frequently asked questions
It depends. According to the Department of Labor, if certain factors are met, an employment relationship does not exist under the Fair Labor Standards Act (FLSA), and the Act's minimum wage and overtime provisions do not apply to the intern.
Courts have used the "primary beneficiary test" to determine whether an intern or student is, in fact, an employee under the FLSA. This test allows courts to examine the "economic reality" of the intern-employer relationship to determine which party is the "primary beneficiary". Some of the factors considered include the extent to which the internship provides training similar to an educational environment, whether the intern displaces regular employees, and whether there is an expectation of compensation.
In some states, both paid and unpaid internships legally count as employment, providing interns with increased legal protections and access to benefits such as workers' compensation and unemployment benefits. However, this may vary depending on the specific circumstances and the structure of the internship program.
