So You Want To Hire An Intern? Why You Really Should Learn The Law First

Exciting news people!! I”d like to introduce Notations newest intern and contributor Nadine Ona. She will writing with posts, assisting with research and helping with events. I am SO excited about what lies ahead and hope you enjoy her very first post. A bio will soon follow.

Once upon a time, a railroad company found itself having to defend its practical training course in front of the Supreme Court.  The course, which lasted eight days, was a necessary requirement if an individual  wished to seek permanent employment with the company.  What was the problem?  The training was unpaid.  Which, of course, caused many to question whether or not such an arrangement was even legal.

Further investigation into the railroad company’s practical training course yielded a few significant findings:

  • First, trainees could have gone to a school or a college for the same type of experience that the railroad company’s course offered, but they chose instead, and willingly, to go to the latter.
  • Second, the course was solely for the benefit of the trainees.  The employers reaped no benefit whatsoever from having the trainees hang about the workplace – in fact, the trainees sometimes even slowed business down to a significant degree, and thus were something of a hindrance.
  • Third, the trainees didn’t displace any employees, but rather worked under their close supervision.
  • Fourth, the trainees weren’t entitled to jobs after the course ended.
  • And fifth, both the employer and the trainees understood that no wages would be paid during or for the course.

What did the Supreme Court end up deciding?  That the course was, in fact, entirely legal.

Why is this case so important?  Well, it dates back to 1947.  But the railroad company’s practical training course, if it existed today, would casino be better known as an internship.  Because isn’t that what an internship technically is?  Unpaid practical training?

In this particular case, the company did everything right, as per the law.  But in a time when more organizations are looking for interns and more individuals are desperate for internships, non-profit organizations ought to become familiar with the law in order to avoid the legal pitfalls that are so easy – and even tempting – to fall into.

The Department of Labor has attempted to help by devising a short but very important test for unpaid interns – as long as all of the criteria are met an internship will likely be considered to be on the right side of the law.

To ensure compliance keep in mind the following:

“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.”

Because non-profit”s generally have smaller budgets, it’s easy to get carried away with utilizing interns to solve issues with inadequate manpower.  Hiring an intern could also seem like the easier solution when compared to hiring a new staff member. But remember, although unpaid, interns are still covered by the Fair Labor Standards Act (FLSA) – and failure to adhere could spell legal trouble.

For more information on what provisions the FLSA supplies for interns, have a look at the Department of Labor’s website: http://www.dol.gov/whd/regs/compliance/whdfs71.htm

The New York Times also has an interesting article on the legal or not question of unpaid internships: http://www.nytimes.com/2010/04/03/business/03intern.html

Supreme Court document on the railroad company case: http://scholar.google.com/scholar_case?case=15083465931783509705&hl=en&as_sdt=2&as_vis=1&oi=scholarr