Internal Affairs
Do unpaid interns sound like a good source of free labor? Think again!
Your brainstorm about relieving your overworked employees
without additional costs sounds flawless: Bring in some students
from the local college as unpaid interns, promise them valuable
experience and perhaps some college credit, and put them to work on
routine chores. Better think twice, though, or you'll risk
running afoul of the Fair Labor Standards Act (FLSA).
A public relations agency in Atlanta learned the hard way after
billing clients for work performed by its interns. The U.S.
Department of Labor investigated and found the agency had violated
one of the six criteria for distinguishing interns from employees:
The business must not gain immediate advantage from the
interns' work. The Labor Department extracted a settlement
requiring the agency to pay interns $31,520 in back wages and to
pay current and future interns the federal minimum wage.
Donald T. O'Connor, an attorney with law firm Buchanan
Ingersoll PC in Pittsburgh whose labor and employment law practice
focuses on wage and hour issues, notes that interns can be ideal
workers--hungry to learn, eager to make good impressions and
willing to perform the most menial tasks. And an internship program
gives your company a pool of potential employees who already know
your business. "You can see how they perform and how they take
instructions," O'Connor says. But, he adds, it's a
mistake to think of interns as cheap labor.
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Unless your internship program is essentially educational, your
interns may look suspiciously like employees, who are entitled to
the federal minimum wage. (The FLSA, which established the minimum
wage and overtime requirements, applies to all companies with two
or more employees and annual sales of at least $500,000.)
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