The Fair Labor Standards Act (FLSA) is the federal law that regulates minimum wage and overtime, including how these issues should be handled in connection with a summer internship. Employment is defined broadly such that anyone who is suffered or permitted to work is employed. The United States Department of Labor enforces the FLSA, and it uses a six-part test to decide whether you should be paid minimum wage for your summer internship.
An unpaid internship is only appropriate under the six-part test when: (1) the intern doesn’t displace a paid employee, (2) the internship is for the intern’s benefit, (3) the internship is similar to training that would be provided in school, (4) the employer doesn’t benefit from the intern’s work and sometimes may be disrupted by what the intern is doing, (5) the intern isn’t promised a job once the internship is over, and (6) both the intern and the employer understand that the job is an unpaid position.
If you are closely supervised by existing staff and are not “seasonal help,” you probably didn’t displace a paid employee. However, if your employer would have hired more people to do the work you’re doing if you hadn’t joined as an intern, you are likely entitled to FLSA pay.
When the internship is solely for your benefit, you likely aren’t entitled to FLSA pay. The critical question here is whether you leave with a better understanding of certain professional skills than you previously had. Also at issue is whether your doing the work that allowed you to gain those skills provided a benefit to your employer or not.
Specifically, your employer must not get an immediate advantage from your work or must be disrupted in order to deny you FLSA pay under the six-factor test. The Department of Labor looks at the employer’s net gain to see whether you benefit more from the internship than your employer does.
In order to be training similar to what you get in school, the internship should have specific goals for your development. For example, if your employer has a syllabus, assignments, and a program description or is working with a university that oversees the internship and provides educational credits, it is likely that this factor is met.
The Department of Labor looks at whether you and your employer had an agreement that you would be entitled to a job once the internship was over. Some employers present a job opportunity as an unpaid internship to get free work while trying an employee out. If an employer is trying you out as a traditional employee, it should be paying you minimum wage and overtime. Moreover, both you and your employer need to have an understanding that you’re not entitled to wages for the sixth factor to be met.
If you are interning at a company that is for-profit, it is rare that you’d be able to meet all six of these factors. It is rare that work done by an intern wouldn’t benefit the company or otherwise provide some type of advantage from the intern’s work. Providing a lunch or stipend doesn’t count as pay, if the employer doesn’t meet those six factors. If even one of those factors is not met, you are probably supposed to be paid minimum wage and overtime under the FLSA.
The situation is slightly different for the purposes of this analysis if you are working for a nonprofit. There is an exception for unpaid interns who are volunteering their time in the public sector or for nonprofit charitable organizations. Thus, for example, if you are interning on Capitol Hill with a Senator or Representative or even the White House, you may have to intern free. Congress has exempted itself from the FLSA.
If you are concerned about working for free as an intern and believe your employer doesn’t meet the six steps, you have three options: file a Department of Labor complaint, work it out with your employer, or sue.
For many summer interns, the amount of time it takes to resolve a case—sometimes years—makes it harder to obtain justice. You should retain a skillful attorney to represent you. If you believe you are entitled to minimum wage or overtime for a summer internship in Texas, you should contact us at (214) 528-6500 or via our online intake form.
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