The Labor Department's Wage and Hour Field Operations Manual sets six criteria for distinguishing interns from employees:
1. Although the training might include equipment and procedures specific to this employer, it must consist primarily of experiences similar to those offered in a vocational school. It's not enough just to put the interns to work with supervision. For instance, when a snack-food distributor merely had interns help a driver service a regular route for a week, the Labor Department required the employer to pay them for the work.
2. The intern must not displace regular employees and must work under close observation. Farming work out to unpaid interns after a regular employee quits would raise a red flag.
3. The interns are not necessarily entitled to a job at the completion of the internship. If they are, the experience looks more like the training period at the start of a new job, for which they'd be entitled to fair wages.
4. Both the employer and the interns must understand that the interns are not entitled to wages for the time spent in training.
5. The training must be primarily for the benefit of the intern. That means, O'Connor says, that your interns can't just be making coffee, running errands or catching up on filing. Although such tasks might be incidental to the position, the majority of the experience must be designed with the intern's education in mind.
6. The employer providing the training must derive no immediate advantage from the activities of the intern, whose presence may on occasion actually impede the employer's operations. Although an internship program will benefit your business over the long term by providing a pool of trained applicants with familiar work habits, it's not meant to be a source of free labor.