California Law on Unpaid Internships – Employers Beware!
We receive calls from unpaid interns who are classified as “interns” but actually perform the same work as other employees. Here, it’s important to note a recent increase in successful lawsuits brought by unpaid interns in which unpaid interns claimed they were performing the work of regular employees without being compensated.
Analysis & Risk of Unpaid Internships:
The legality of any proposed unpaid internship is highly fact-intensive. If an intern is doing meaningful work on behalf of a Company, for which others would otherwise be paid at least minimum wage, then the intern should be paid. Work tasks should be merely incidental to the “learning” purpose for which internships were intended.
Depending on the particular set of facts, individuals classified by companies as “interns” may be entitled to unpaid wages and related penalties under the Labor Code. Why? Because, if interns are sorting incoming and processing outgoing mail, then they are a mailroom clerk, not an intern. If interns are answering phones and routing incoming phone calls, they are a receptionist. If the majority of the intern’s time is spent in a mix of those tasks, and not in observing, asking questions, and learning how to perform a task or function, then they are an employee, no questions further.
Department of Labor Requirements:
Here is a link to the Department of Labor’s Wage & Hour Division’s (“DOL”) Opinion Letter on unpaid interns: http://www.dol.gov/whd/regs/compliance/whdfs71.htm
The 6-point test set forth by the DOL is instructive to determine if a proposed intern relationship can legally be classified as unpaid. In order for a worker to qualify for an unpaid internship, the following criteria must be met: (1) the internship has to provide training similar to what would be provided in an educational environment; (2) the experience has to be for the benefit of the intern; (3) the intern cannot displace regular employees and work under the close supervision of existing staff; (4) the employer can derive 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 must have an understanding that the intern is not entitled to wages.
Don’t hesitate to call our office at 949.260.2025 with any further questions you may have.