Summer Interns Need to be Paid

Intern season in New York is in full swing. Employers offering summer internship programs must ensure that they structure their programs in compliance with federal and state wage hour laws to avoid risk of liability.

Employers generally have to pay interns, unless they fall into the specific criteria under the U.S. Department of Labor Wage and Hour Division. Under the Department of Labor regulations, internships are generally presumed to form an employment relationship under the Fair Labor Standard Act (FLSA) unless, the internship satisfies the seven factor “primary beneficiary test.”

The test is even stricter for employers in New York. The New York State Department of Labor has listed eleven criteria to determine whether interns are exempt from the requirements of minimum wage and overtime and if an employment relationship exists. An employment relationship is presumed to exist unless the internship meets all eleven of the following criteria:

1. The training, even though it includes actual operation of the employer’s facilities, is similar to training provided in an educational program.
2. The training is for the benefit of the intern.
3. The intern does not displace regular employees and works under close supervision.
4. The activities of trainees or students do not provide an immediate advantage to the employer. On occasion, operations may actually be impeded.
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period and are free to take jobs elsewhere in the same field.
6. The trainees or students are notified, in writing, that they will not receive any wages and are not considered employees for minimum wage purposes.
7. Any clinical training is performed under the supervision and direction of people who are knowledgeable and experienced in the activity.
8. The trainees or students do not receive employee benefits.
9. The training is general and qualifies trainees or students to work in any similar business. It is not designed specifically for a job with the employer that offers the program.
10. The screening process for the internship program is not the same as for employment and does not appear to be for that purpose. The screening only uses criteria relevant for admission to an independent educational program.
11. Advertisements, postings, or solicitations for the program clearly discuss education or training, rather than employment, although employers may indicate that qualified graduates may be considered for employment.

If you believe you are a victim of wage theft or have questions about your rights as an intern, contact the attorneys of Pechman Law Group at 212-583-9500.