Summer is almost here, and with summer will come interns and the recurring question, "Do I have to pay an intern?" The short answer is, "It depends." The Department of Labor has derived six criteria from a Supreme Court decision, Walling v. Portland Terminal Co., 330 U.S. 148 (1947), to determine whether the intern (" trainee") is exempt from the Fair Labor Standards Act ("FLSA"). If an individual is subject to the FLSA he/she must be paid at least minimum wage. The six criteria to determine whether an employer is exempt from paying an intern are:
1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
2. The training is for the benefit of the trainee;
3. The trainees do not displace regular employees, but work under close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer's operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the completion of the training period; and
6. The employer and the trainee understand that the trainees are not entitled to wages for the time spent in training.
All six criteria must be met or the intern must be paid in accordance with the FLSA. The kicker is no. 4. The employer can only avoid paying the intern if the intern provides no immediate benefit and actually, on occasion, costs the employer money. In other words, if you are an employer, the same reasons you want to utilize interns mandate you pay them. The bottom line here: it's a better practice to pay interns minimum wage, unless of course you enjoy litigation. GSF