How to Avoid Intern Lawsuits this Summer Season

By Gabriella Khorasanee, JD on May 21, 2014 | Last updated on March 21, 2019

Last week, we gave you an update on the status of intern litigation -- old and new. Today, we're going to look at what actions you can take to protect your company from the intern litigation trend.

Here are some things for the legal department to consider to avoid intern litigation.

Is your company a for-profit company?

If so, then you'll need to read on to determine whether the facts and circumstances of your company's internships are really internships, and not employment, according to the Department of Labor.

If your company is a non-profit food bank, or a non-profit organization whose purpose is "religious, charitable, civic, or humanitarian," then "intern volunteers without expectation of compensation, are generally permissible," according to Labor.

Department of Labor's Six-Factor Test

To determine whether a person is an intern or employee under the Fair Labor Standards Act, you must look at the facts and circumstances of the 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.

Only if all of the factors above are met, will the program be deemed an internship. If it's determined the program is an internship, then compensation is not required. If however, the program is more akin to employment, your company must pay minimum wage, and overtime compensation.

Different Departments

At a large company with departments as diverse as marketing and finance, it's imperative to make sure that each department is aware of the requirements for internship programs. The content of the training will be different in the IT department, than it is in the marketing department, but the six factors enumerated by the Department of Labor must be taken into account regardless.

The intern litigation trend is heating up this summer, and shows no sign of slowing down. No for-profit company is safe; to really protect your company look at the Department of Labor's six factor test. But really, the best protection of all is to pay your interns.

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