Paying Interns and (More) New Rules

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The struggle to get back into the groove after the holidays wasn't real enough for you?  The time to begin thinking about hiring summer interns is right around the corner, and the Department of Labor just flipped the script on whether those interns have to be paid.

How's that for a jolt of reality??  Do we have your attention?  Good!  Because this is propably a good thing for most companies and entrepreneurs.

Where the 2010 Obama Era rules required each one of the six factors must be met in order to avoid paying interns, the new rules are more relaxed.  Unlike before, employers need not prove all of the elements, and no single factor is determinative.  Thus, the assessment of whether an intern should be paid is left to the facts of a particular case.  These new factors are:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.

  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions

  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit

  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar

  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning

  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern

  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship

Since every company's circumstances are different, your individual mileage may vary.  We strongly encourage you to get together with your operations and legal team to map out your plans for spring and summer hiring.

Good luck!!