With the start of this new semester, we have received several questions regarding whether student interns need to be paid. As everyone knows, state and federal law requires employers to pay employees for their work. However, employers may have some wiggle room when it comes to student interns.
Generally, a seven-factor test is used to determine whether a student intern is an employee. While no one factor outweighs the others, courts consider the following when determining whether or not a student intern is an employee, and thus subject to minimum wage and overtime requirements:
- Are both parties aware that the intern is not entitled to compensation? The promise of compensation of any kind, whether expressed or implied, suggests the student intern is an employee.
- Is the internship providing training that would otherwise be given in an educational environment? If the internship is similar to a hands-on training or clinical hours the student intern would receive at school, it is less likely the student is an employee.
- Is the student entitled to academic credit at the end of the internship program? If the answer is yes, it is unlikely the student intern will be considered an employee.
- Is the internship tied to the academic calendar? The student intern is not likely to be an employee if the internship lasts for a semester or the school year. However, the student intern is likely to be an employee if the internship is set to last for an indefinite period.
- Is the internship limited in duration to where the intern is receiving beneficial learning? A student intern is less likely to be considered an employee if the student intern is receiving significant educational benefits for a limited duration of time.
- Is the intern displacing paid employees? If the student intern is essentially filling the role of a paid employee without being provided significant educational benefits, the student intern is more likely to be considered an employee.
- Is the intern entitled to a paid job at the end of the internship? A student intern is more likely to be considered an employee if they are entitled to transition to a full-time position at the end of their internship.
Guidance from the Department of Labor has found that students are not considered employees if they receive college credit in exchange for real life situational experiences they cannot obtain in a classroom. Additionally, students are not considered employees if the internship is designed to provide professional experience that furthers the student’s education, so long as the program is academically oriented.
There is no one-size-fits-all approach to determining whether a student intern is classified as an employee for the purpose of wage and hour laws. Bricker Graydon’s Labor & Employment team is here to help you run a case-by-case analysis for each of your interns. Contact us today with any questions.
