For-Profit Organizations Should Pay Their Interns to Ensure Compliance in Business and at Work

In my HR compliance travels, I’m often asked how a for-profit business without an in-house human resources professional can compliantly hire an unpaid intern. Aside from the fact that “hire” and “unpaid” are mutually exclusive, it’s by and large too complicated for most for-profit businesses to compliantly engage unpaid interns.

Instead: the strong recommendation for a private-sector, for-profit business to ensure compliance is to hire their interns as temporary / seasonal (or regular) employees, paid at least the hourly minimum wage – which for upstate New York in 2020 until December 31st is $11.80 an hour.

The reason for the above recommendation? Does anyone in your business have time to comply with NYS DOL’s requirements, below – and can you 100% guarantee that (especially in a small business), that your intern(s) won’t perform tasks typically assigned to paid employees and/or administrative functions like making copies, running errands, etc.?

In general, an intern is only exempt from the requirements of the Minimum Wage Act and Orders if the intern is not in an employment relationship.

An employment relationship does not exist only if the situation meets ALL of these criteria:

1. The training, even though it includes actual operation of the employer’s facilities, is similar to training provided in an educational program.

2. The training is for the benefit of the intern.

3. The intern does not displace regular employees, and works under close supervision.

4. The activities of trainees or students do not provide an immediate advantage to the employer. On occasion, operations may actually be impeded.

5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period and are free to take jobs elsewhere in the same field.

6. The trainees or students are notified, in writing, that they will not receive any wages and are not considered employees for minimum wage purposes.

7. Any clinical training is performed under the supervision and direction of people who are knowledgeable and experienced in the activity.

8. The trainees or students do not receive employee benefits.

9. The training is general, and qualifies trainees or students to work in any similar business. It is not designed specifically for a job with the employer that
offers the program.

10. The screening process for the internship program is not the same as for employment, and does not appear to be for that purpose. The screening
only uses criteria relevant for admission to an independent educational program.

11. Advertisements, postings, or solicitations for the program clearly discuss education or training, rather than employment, although employers may indicate that qualified graduates may be considered for employment.

Rather than grappling with the above criteria: do you ensure that your interns are paid at least minimum wage, in business and at work?