The View from HR

When must you pay an intern? Most of the time

July 13, 2013 

When it comes to the issue of unpaid interns, as the saying goes, there is no free lunch – even if you help cook and clean up the kitchen.

Our federal Department of Labor and Congress make it nearly impossible for companies to bring on an intern to perform some level of productive work without payment of at least the minimum wage. A few exceptions exist for charities, public employers, children of owners and certain courses for academic credit.

Then there is this variation: Can someone volunteer in a business and purposefully refuse any payment? Generally, the answer is no. Working interns and volunteers are prevented from willingly rejecting payment in exchange for the great experience they will receive. If they do nothing productive and are essentially a cost in time, mentoring or teaching, you may not have to pay the volunteer or intern. However, the best intern experiences usually produce real work product.

The law is based on good intent. It is easy to see how some employers might force employees to “volunteer” once they reach 40 hours in a week, or how inexperienced or unemployed people could be subject to abuse.

I can hear it now from those employers and interns who happily completed unpaid internships: “It worked great for everyone; we hired half of the interns full time.” The Labor Department does not care that everyone was happy and some people got hired. It is only empowered to apply its multipart test and spit out an answer along with a bill, usually when someone complains.

The same analysis and employer surprise holds true when hourly paid employees answer emails from home after work, go above and beyond on a weekend without expecting extra pay, leave at 6 p.m. with a project unfinished and return the next morning with it completed, and so on. Work is work, and it generally requires payment. Again, there are a few exceptions to this rule, as listed above.

What is a well-intentioned employer to do? Paying the minimum wage – or more – is the cleanest answer. It may mean fewer people get opportunities, but it keeps everything aboveboard. Yes, overtime pay is also required for any work beyond 40 hours per week for hourly employees.

Another path toward compliance is to ensure work is a very occasional and unintended byproduct of the activity. If the real purpose and what actually takes place are a teaching process with no expectation of work product, payment may not be owed. Employers would be advised to seek advice pertaining to their specific situation.

The penalty for noncompliance is typically payment of owed wages, at the minimum wage plus any applicable overtime, especially where there was no intent to violate the rules.

“The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread,” wrote philosopher Anatole France. Wage-and-hour laws have similar equality features by preventing abuses while also discouraging truly volunteer, mutually beneficial, mind-expanding, résumé-building experiences so very helpful to job mobility today.

This outdated law gives employers and would-be interns one more reason to “call your representative!” In the meantime, offering and seeking internships is a great way to connect eager learners with potential employers.

Bruce Clarke, J.D., is president and CEO of CAI Inc., a human resource management firm, with locations in Raleigh and Greensboro. CAI helps organizations maximize employee engagement while minimizing employer liability. For more information, visit www.capital.org.

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