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The Honolulu Advertiser
Posted on: Wednesday, June 6, 2007

Interns regulated by labor laws

By Joyce M. Rosenberg
Associated Press

NEW YORK — Across the country, as millions of high school and college students spend the summer working as interns at small businesses, company owners should be aware that treating these young people as unpaid workers could run them afoul of federal and state labor authorities.

Labor lawyers and human resources executives, note that internships are intended to educate or train students and help them earn school credit, and say many small businesses make the mistake of using interns to do the same work other staffers do. Many use interns to fill in for vacationing employees, or do odd jobs around the office or factory.

If these interns aren't being paid, that's a violation of the federal Fair Labor Standards Act and also laws in many of the states, said Marc Zimmerman, a labor and employment attorney with the law firm Philips Nizer LLP in New York.

"You must pay at least minimum wage for all hours actually worked" and overtime when applicable, Zimmerman said.

Zimmerman said that under federal law — which regards an internship as a training program — there are six criteria that an internship must meet. Fail to meet any one of them, and the government could consider the intern to be an employee.

First, he said, the intern must receive training similar to what he or she would receive in a vocational school.

Second, the training must be for the benefit of the intern.

Third, the intern must not be displacing a regular employee in other words, doing a regular employee's work.

No. 4 is probably the acid test: "An employer has no immediate advantage from the activities" of the intern, Zimmerman said.

Fifth, the intern is not necessarily entitled to a job at the end of the internship.

Sixth, both the intern and the employer understand that the intern is not entitled to wages.

A student may be able to receive a stipend, however.

Violating the FLSA can subject a small business to steep fines and penalties. A company can also leave itself open to sanctions for federal and state human rights laws violations if an intern is not paid for work and should be, Zimmerman said.

There are other legal considerations, said Rick Gibbs, a senior human resources specialist with the professional employment organization Administaff Inc. "There could be liability issues in terms of having a person work in a dangerous situation, and certain requirements in respect to minor labor laws," if the intern is under age 18, Gibbs said.

Beyond legal issues, internships can be problematic because students need to be doing tasks that will help them learn — that's what the internship is supposed to be all about.