Most unpaid internships are illegal. The New York State Department of Labor has issued a fact sheet detailing when so called “interns” must be paid at least minimum wage. The fact sheet sets forth a stringent eleven-factor test. Far too many companies exploit employees under the guise that their work is an unpaid internship. More often than not, the company is simply benefiting from unpaid labor.
Below, we detail the eleven factor test employed by the New York State Department of Labor to determine whether someone fits the definition of an unpaid intern, or is really an employee entitled to wages.
11-Factor Test for Unpaid Internships
1. The purpose of the unpaid internship is training.
It is an internship, not a job, so the intern must be trained to do something. Moreover, the training must be similar to the type of training provided in an educational program. An employer cannot simply rely on the argument that, because the intern is learning on the job, he/she is not entitled to wages. The training has to be similar to classroom learning.
2. The training benefits the intern.
The intern, not the employer, must be the primary beneficiary of the training.
3. The intern does not displace regular employees and works under close supervision.
If the intern is doing work that would otherwise be performed by a paid employee, the intern should probably receive pay for that work as well.
4. The activities of the intern do not provide an immediate advantage to the employer.
In fact, on occasion, the employer’s operations may even be impeded. The nature of an internship is that it is for the benefit of the intern – not the employer. Thus, if the work of the intern provides an immediate advantage to the employer, it is probably not an internship.
5. The intern is not necessarily entitled to a job at the end of the internship.
Employers may not use an unpaid internship as a trial period. It is an internship, not an audition.
6. The interns are told – in writing- that it is an unpaid internship and that they are not considered employees for purposes of the minimum wage laws.
7. Training is done under the supervision and direction of people who are knowledgeable and experienced in the activity.
8. The intern does not get employee benefits, like health, dental, pension, etc.
9. The unpaid internship training is general in nature and prepares the intern to work in a similar business.
It is not designed with a specific job for the employer in mind. In other words, it is not a training program for the company, it is a training program for the intern in a more general sense.
10. The intern screening process is not the same as the employer’s regular hiring practices.
Interns and employees are different and should be treated differently.
11. Advertisements, postings, or solicitations for the unpaid internship clearly discuss education or training, rather than employment
Employers are, however, permitted to indicate that qualified graduates may be considered for employment.