Legal Issues Employers Should Know

The possibility of free labor in the form of student interns may be a tempting one for employers.  However, employers must be aware of and ensure compliance with the Fair Labor Standards Act (FLSA), before classifying an intern as an unpaid "trainee." If an intern is considered an "employee" for purposes of the FLSA, then the employer must pay its interns at least the minimum wage.

"Employee" is defined by the FLSA as "any individual employed by an employer." Under the FLSA, to "employ" means "to suffer or permit to work." Since this definition is somewhat circular, the Department of Labor's Wage and Hour Division developed a six-factor test for determining whether workers are to be considered "trainees" or "employees" under the FLSA:

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 vocation school;
2. The training is for the benefit of the trainee;
3. The trainees do not displace regular employees, but work under close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer's operation may actually be impeded;
5. The trainees are not necessarily entitled to a job at the completion of the training period;
6. The employer and the trainee understand that the trainees are not entitled to wages for the time spend in training.