1 of 2 DOCUMENTS NEW JERSEY EMPLOYMENT LAW LETTER JULY, 2010

Unpaid summer internships may violate federal wage and hour laws
BYLINE: Pitney Hardin LLP SECTION: Volume 18, Issue 9 LENGTH: 471 words Must employers treat summer interns as employees and pay them minimum wage and overtime? The Wage and Hour Division of the U.S. Department of Labor (DOL) recently issued a fact sheet to answer that question. Summer interns may be exempt from wage and hour laws if the internship provides training for their educational benefit. Six-factor test To qualify for the exemption, a summer training program must meet each element of the following six-factor test: (*) Even though the program takes place at the employer's site, the internship must be similar to training received in an educational environment. To meet this requirement, you should structure the internship as an academic experience rather than have interns perform routine business operations. The requirement may be met if the intern's college monitors the program and offers educational credits for participation in the internship. (*) The internship benefits the intern. You may not operate the internship to further your organization's business needs. Rather, the program should be for the benefit of the intern. For example, it should provide skills for the intern to use in various settings, and the intern's role shouldn't focus on performing the routine work of the company. If an intern spends his time performing clerical tasks or assisting the employer's clients, he will probably be considered an employee and must receive wages. (*) The intern works under close supervision and doesn't displace employees. You cannot use unpaid interns to replace or supplement your regular workforce. An intern may work closely with (or "shadow") an employee for training purposes but should perform little or minimal work during "shadow" training. (*) The employer shouldn't benefit from the intern's activities, and in some circumstances, the intern's activities may impede business operations. If the internship benefits the employer's operations, the DOL will treat the intern as an employee for wage payment purposes. (*) The intern may not necessarily receive an offer of employment at the end of the internship. You should set a specific duration for the internship at the outset of the program. The intern shouldn't have an expectation that the program is merely a trial period for permanent employment. (*) The employer and intern understand that the intern will not receive wages. To qualify for the exemption, you may not pay the intern for his participation in the program. Your internship program must meet all six factors to qualify for an exemption from wage and hour laws. Bottom line

Employers of all sizes offer paid and unpaid summer training programs. The DOL's guidance will help ensure that employers don't inadvertently violate wage and hour laws when providing these programs. Copyright 2010 M. Lee Smith Publishers LLC LOAD-DATE: July 8, 2010 LANGUAGE: ENGLISH Copyright 2010 M. Lee Smith Publishers & Printers