U.S. Labor Department Releases New Internship Rules

This week the U.S. Department of Labor released a statement regarding unpaid internships clarifying employers’ and colleges’ roles under federal law.

This fact sheet provides general information to help determine whether interns must be paid the minimum wage and overtime under the Fair Labor Standards Act for the services that they provide to “for-profit” private sector employers.

The document applies a six-part test derived from the 1947 Supreme Court decision, Wallington v. Portland Terminal Co., 330 U.S. 148, which involved railroad-company trainees and whether they were considered “employees” within the meaning of the FLSA during the mandatory training period and thus eligible for compensation.

For interns to work for private companies without compensation their positions must meet the following six criteria.

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 derives no immediate advantage from the activities of the intern and may actually be impeded by his/her presence.
5. The intern is not necessarily entitled to a job at the end of the internship
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Check out the DOL’s Wage and Hour Division website for further info.

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