Posted on May 17, 2010 on Tips of the Month by
With final exams coming to an end, many students are eager to gain real world experience through internships. Meanwhile, employers looking to save money while getting some extra summer help are happy to offer this real world experience in the form of unpaid internships.
However, in order to comply with the Fair Labor Standards Act (FLSA) (the federal law that covers minimum wage, overtime pay, recordkeeping, and youth employment), employers must make sure their unpaid internship programs and their unpaid interns meet all the necessary criteria under the law. One of the key requirements for interns working without pay is that they must receive college or high school credits for the internship. Another requirement is that the intern cannot replace a paid employee. There are several other requirements, and all must be met before an unpaid internship can satisfy the FLSA.
While hiring unpaid interns can be a great money saver, failing to comply with the FLSA (and other applicable federal and state laws) can result in costly fines and penalties. Worse yet, a government invesatigation can start with unpaid interns but end with a full investiagation of all your employment practices. With federal and state agencies promising enhanced enforcement efforts, employers looking to use unpaid internships should be sure to consult competent counsel to make sure their programs are in compliance.