Unpaid Intern, cont. from page 17
What about interns? Well, the law stringently governs who counts as an intern. True interns under the law are actually “trainees.” The Department of Labor identifies six legal criteria that must be applied to determine whether a trainee is exempt from wage laws. The criteria are as follows: 1. The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school. 2. The training is for the benefit of the trainees or students. 3. The trainees or students do not displace regular employees, but work under their close observation. 4. The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may be actually impeded. 5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period.
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training. The criteria are applied by looking at the totality of the circumstances. No one factor is more important than any other, and the particular circumstances of a given trainee are taken into account. This means that there is very little predictability about whether a particular “trainee” is or is not properly classified as an employee: A dangerous reality for employers! In addition, the above criteria are specific and demanding. It is clear that the law is written so as to ensure that a trainee program is set up first and foremost to benefit trainees. The law is less concerned with the benefits that trainees provide to employers. In fact, any benefits to the employer are treated as incidental. And looking to the fourth factor, if an organization derives any immediate advantage from the activities of an intern, then this fact alone will likely transform an intern into a legal employee. Another important point to note is that interns cannot displace regular employees, so if an organization is bringing in “interns” at the same time that it is cutting back employees, this criterion weighs against the employer. This factor is geared towards protecting the job stability or prospects of employees.
Where Does this Leave an Organization that Wants to Bring on Summer Help? Assuming that you still want to bring on summer help (or temporary help any time of the year), then reflect on why you want to do so. If the answer is to benefit your organization, then the best practice is to hire employees and comply with all the wage and hour requirements that apply.
Carol W. Wu, Esq., CLPF Lori Hefner, MBA, MA in Gerontology & CLPF
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JULY 2015
Even one legal claim filed against the organization will more than likely cost more than the anticipated savings of illegal volunteer positions or internships. In the state of California, wage violations carry liquidated damages. If you tack on to that exposure the other civil penalties, attorneys’ fees and other potential wage damages, the potential exposure to an employer’s pocketbook is incredibly high. Additionally, a single claim can quickly turn into a class action if you have hired multiple incorrectly classified “interns” over the years. s Michelle Ferber is the Managing Shareholder of Ferber Law, P.C., in San Ramon. Michelle specializes in employment litigation and advice and counsel. Brooke Barnum is an associate attorney with the firm.