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May 09, 2011
1 in 3 Employers Have Unpaid Interns, According to Poll

Around 30 percent around of respondents said their organizations have unpaid interns, according to a recent poll. If your organization is looking to fill unpaid internships this summer, it’s important to make sure you are compliant with the Fair Labor Standards Act (FLSA).

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The poll asked respondents, “Does your organization have paid or unpaid interns?” The results are displayed below:

We have paid interns only.
40%
We don’t have interns.
29%
We have both paid and unpaid interns.
19%
We have unpaid interns only.
12%

To pay, or not to pay?
Employers must pay an intern unless certain requirements are met. Internships in the for-profit, private sector will most often be viewed as employment by the Department of Labor (DOL), unless the internship passes the 6 factor test described below.

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives 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 understand that the intern is not entitled to wages for the time spent in the internship.

According to the DOL, if all of these six factors are met, an employment relationship does not exist between an intern and the company, and the intern does not have to be paid under FLSA.

Participate in this week's Compensation poll.

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