In our current economic climate, internships are high in demand. People (or students) looking to start a new career may look to internships to seek experience. And on the flip side, small businesses without the budget to hire new employees may look hire interns. But business owners need to be sure that they don’t take on interns only to save money. Federal labor laws are fairly direct in saying that internships should be for the benefit of the interns, not their employers. Thus, it all boils down to a simple principal; an intern is not free labor.
But what is the distinction between an employee and an intern? The Fair Labor Standards Act (FLSA – federal statute governing wages) defines an “employee” simply as “any individual employed by an employer.” The term “employ” under the FLSA means “to suffer from or permit to work.” Moreover, under the FLSA, an intern must receive training similar to that offered in a vocational school, and the training must be for the benefit of the intern.
In interpreting the FLSA, the United States Supreme Court has found that trainees may be excepted from the minimum wage provisions of the FLSA. The U.S. Department of Labor’s Wage and Hour Division used the Supreme Court’s 1947 decision to develop and outline six criteria for determining trainee status: