Managers should rethink plans to use interns

Recent lawsuits filed by interns at for-profit companies mean the Labor Department might renew its focus on regulations behind using interns.

If you think the use of unpaid interns is just a socially acceptable version of indentured servitude, you might want to check your facts (and your ethics). While the definition of what constitutes an intern vs. paid employee has not always been clear, it seems that the Department of Labor might start clamping down on corporations that cross the line.

Recent cases in big media companies (one against Hearst Corporation, one against Fox Searchlight Pictures) have brought new attention to the use of interns in for-profit companies. In other words, you can't just bring in an intern because you need someone to take care of the crap work but can't afford a new hire.

The Labor Department has a fact sheet that better defines internship programs under the Fair Labor Standards Act. It says in part:

The Supreme Court has held that the term "suffer or permit to work" cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program.

The following six criteria must be applied when making the determination:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all the factors listed above are met, an employment relationship does not exist under the FLSA.