For employers who offer them, unpaid internships are a win-win for both the business and the intern. The intern receives job training in a company that might even hire him or her in the future. The company gets an enthusiastic worker who is interested in the business and whom they do not have to pay for hours spent on the job.
But unpaid internships may also present additional issues from a legal standpoint. Under the federal Fair Labor Standards Act (FLSA) and the New Jersey State Wage and Hour Law (N.J.S.A. 34:11-56a, et seq.), there are certain minimum wage and overtime requirements for employees. By law, the definition of “employ” is broadly construed, thus a wide array of individuals could classify as employees for purposes of either federal or state protection. Moreover, the federal Department of Labor has emphasized enforcement of the FLSA for unpaid interns who qualify as compensable employees. Furthering the concern for employers are the recent collective action lawsuits in both the media and entertainment industries where unpaid interns sought wages for summer hours worked in various positions.
The Bottom Line
Here’s what employers need to know:
1. Make sure your interns meet the qualifications for an unpaid intern.
2. If they do not meet those requirements, consult the FLSA for the requisite minimum wage and overtime.
An unpaid internship is a wonderful opportunity to ‘try out’ a worker in your company. Make the most of it by knowing your legal rights, and theirs.
Justin Britton is an associate in Cooper Levenson’s Labor & Employment and Casino & Hospitality Industry Defense Litigation practice groups. He focuses his practice on all aspects of employment and labor law and litigation as well as the defense of negligence, premises liability, and personal injury claims.
Justin is licensed to practice law in New Jersey and Pennsylvania as well as the United State District Courts for the District of New Jersey and Eastern District of Pennsylvania. For more information, please contact Justin at 609.572.7422 or via e-mail at jbritton@cooperlevenson.com.
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