Private law firms that take on unpaid interns and externs need to be careful. Many industries are seeing an uptick in lawsuits by former interns and externs claiming they should have been paid, should have been provided with a required meal and rest periods and otherwise treated as employees, not the volunteers they were touted to be.
The general rule in California is that any person that suffers or permits another to perform work for them is an employer and the California Labor Code will apply to that relationship. An internship or externship falls outside of that general definition only if the workers attain the special status of trainee or intern who performs some work as part of an educational or vocational program. Unless the internship is set up to fall within the exception to the general rule, an intern is nothing more than an employee with a different label attached to him or her, and all of the laws related to how to treat an employee applies equally to that intern. Thus, unless the internship is clearly within the legal exception to the rule, the intern has the right to be paid, the right to meal and rest periods, the right to accurate and timely paychecks and pay stubs, and all other rights of an employee. The intern cannot be asked to waive those rights; any attempt to procure a waiver would be void as a matter of law.
To determine if a particular internship falls within the legal exception requires knowledge of both the federal and state labor codes which both apply to California employers. We start with the federal Department of Labor’s six-part test for determining the legality of an unpaid internship. The DOL issued a Fact Sheet #71 that provides the following six requirements for such an unpaid internship:
1. The internship, even though it includes actual operation of the facilities of the employer, must be similar to training which would be given in an educational environment;
2. The internship experience must be for the benefit of the intern;
3. The intern cannot displace regular employees, but must work under close supervision of existing staff;
4. The employer that provides the training cannot derive any 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.
In addition to the six-factor Department of Labor test, some courts have held an unpaid internship in California must meet five additional requirements:.
1. Any internship should be part of an educational curriculum. The internship must be a partnership between employer, school and intern. No one can just show up and start working for nothing with the hope of obtaining some future benefit.
2. The intern should not receive employee benefits.
3. The training received by interns should be general so as to qualify the interns for work in any similar business, rather than designed specifically for a job with the employer offering the program.
4. The screening process for interns should not be the same as for regular employment, but rather must be based on criteria relevant for admission into an independent educational program.
5. Advertisements or postings for internships should clearly describe the positions as educational or training-based rather than employment California clearly requires employers to be upfront regarding the “unpaid” thing.
To be sure your interns do not expose your firm to future wage and hour lawsuits, the internship must be established in a manner consistent with these guidelines. If you have any question at all, it is best to consult with an experienced employment attorney.
Neil Pedersen is a Member of the Executive Committee of the State Bar Law Practice Management and Technology Section. He is the principal of Pedersen APLC, an Orange County, California small litigation firm that focuses primarily on representing employees in discrimination, harassment, retaliation, wage and hour, and leave issues. Neil also teaches a three-unit course on Employment Law at Western State College of Law in Fullerton, California. Neil can be reached at [email protected].
THIS ARTICLE WAS ORIGINALLY PUBLISHED IN THE CALIFORNIA STATE BAR LAW PRACTICE MANAGEMENT AND TECHNOLOGY SECTION’S E-NEWS IN ITS JULY-AUGUST 2015 EDITION. COPYRIGHT NEIL PEDERSEN AND THE STATE BAR OF CALIFORNIA 2015.
