Internship Programs Under The Fair Labor Standards Act - Fact Sheet #71
This fact sheet provides general information to help determine whether interns must be paid the minimum wage and overtime under the Fair Labor Standards Act for the services that they provide to "for-profit" private sector employers.
Background
The Fair Labor Standards Act (FLSA) defines the term "employ" very broadly as including to "suffer or permit to work." Covered and non-exempt individuals who are "suffered or permitted" to work must be compensated under the law for the services they perform for an employer. Internships in the "for-profit" private sector will most often be viewed as employment, unless the test described below relating to trainees is met. Interns in the "for-profit" private sector who qualify as employees rather than trainees typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.
The Test For Unpaid Interns
There are some circumstances under which individuals who participate in "for-profit" private sector internships or training programs may do so without compensation. The Supreme Court has held that the term "suffer or permit to work" cannot be interpreted so as to make a person whose work serves only his or her own interest an employee of another who provides aid or instruction. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program.
The following six criteria must be applied when making this determination:
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no 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.
If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the Act's minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA's definition of "employ" is very broad. ( http://www.dol.gov/whd/regs/compliance/whdfs71.htm )
The Experience Program provides an opportunity for practical application of academic knowledge and skill, while earning academic credit. Under the direction of a faculty sponsor, and with approval of the appropriate Dean, students may work under the supervision of a work-site supervisor at an off-campus outside agency or in an on-campus UMD department. The range of project types and settings is almost limitless, creating exciting ways to enrich one's academic studies, gain valuable experience, and test a tentative career choice.
The Program is administered through the Colleges and requires the development of an Experience Program Contract, an agreement to undertake a significant academic learning experience. Students may obtain forms from their academic department chair or the Career Development Center.
Experience Program Contract --Prerequisites and Requirements:
- Students must have earned at least 30 cumulative credit hours in order to participate.
- Although the typical Experience would earn three credits, Experiences proposing a greater/lesser number of credit hours are also possible. Projects proposing to earn greater than three credit hours will be carefully reviewed.
- Forty-five hours of work should be performed per credit hour earned. Typically, a three-credit experience requires nine hours of work per week (135 total hours throughout the semester), as approved by the faculty sponsor.
- Experience Program credits are part of the normal student credit load and subject to university policy with regard to credit hour limitations.
- Experience Program courses may not be used to fulfill distribution or general education requirements but serve as free electives and may be accepted toward the requirements of some majors.
- Experience Program credits are lower-division credits.
- Students on academic warning or probation are not eligible for the Experience Program, unless their college dean waives ineligibility.
- Supervision of students doing projects under the Experience Program shall in all cases exclude individuals who are themselves undergraduate degree candidates; and a faculty member cannot serve as both supervisor and sponsor.
Business credit cannot be earned though the Experience Program; students pursuing degrees in the Charlton College of Business are offered a junior-level internship course in lieu of participation in the Program. For more information, please contact the Charlton College of Business.
