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Is your Company’s Unpaid Internship Program Illegal? — How to Bring a Claim against a Company For Wages

above-the-bar-logo-no12Has a company refused to pay you for hours worked simply because it calls you as an unpaid intern? If so, you may have some rights and be owed money for the hours you worked. Contact our Award-Winning Employment Lawyers at (800) 893-9645 – we have counseled many workers who were misclassified as interns. Federal and state laws strictly regulate the relationship between a company and whether a worker can be classified as an unpaid intern. The Company must demonstrate all of the factors listed below to qualify for an exception under New York Labor Law (Note: the US Department of Labor uses only the first 6 factors below so the federal standard is not as rigid as state law). In order for a position to be legally classified as an unpaid internship under state law, the Company must demonstrate the following 11 factors are met – otherwise you should be paid for work performed:

1. The worker’s training, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment.

This means the worker should be learning skills that useful industry wide and not just for a specific company. One of the positive factors, although not dispositive, is if the student receives academic credit from a school. Again, the focus here will be on whether the work environment is truly an educational format or just a method for the student to perform work that is traditionally done by an employee.

2. The training is for the benefit of the intern and not primarily for the company.

While company can receive some incidental benefit, the primarily benefit must belong to the intern. Again, conferring academic credit can be a positive factor (but not dispositive) towards showing a benefit to the intern.

3. The intern does not displace an employee and any work the intern does is under close supervision.

Companies cannot use interns to replace or displace new employees. Interns should be closely supervised in an educational setting. Using an intern is generally not as productive as an employee because the intern is supposed to be taught industry wide skills and not simply focused on performing tasks for the employer’s sole benefit.

4. The company should not derive an immediate advantage from the activities of the trainees or students and, on occasion, operations may actually be impeded.

This is similar to the issues discussed in the prior point. To repeat, the hallmark of a lawful relationship will be the educational nature of the working relationship, not the benefit to the company.

5. The intern is not necessarily entitled to a job at the conclusion of the internship and is free to take employment elsewhere in the same industry.

Generally, an internship should be for a set time period and used as a probationary employment period. If the internship is considered a trial period for permanent employment, the NYS Department of Labor may consider the intern was misclassified and should have been treated as an employee.

6. Interns must be been notified, by a clear letter, notice or agreement, that they will not receive any wages for such training and are not considered employees for minimum wage purposes.

This is critical and must be done prior to the start of the internship period. It is a good practice for the intern to sign and date acknowledgement of this notice.

7. The training must be performed under the supervision and direction of individuals knowledgeable and experienced in the activities being performed.

This again goes towards the heart of the analysis – is the intern receiving an educational benefit that is useful industry wide – An individual may be considered to have knowledge and experience in the industry if “[h]e or she is proficient in the area and in all activities to be performed by the trainee, and has adequate background, education and experience to fulfill the educational goals and requirements of the training program.” The supervisor should be experienced in supervising other workers. This should not be the first time the supervisor is acting in such a role.

8. The intern should not receive employee benefits.

If a worker receives employee benefits, there is strong argument that the worker should be treated as an employee and not an intern. Even if the company’s intent is good – no benefits should be provided – even small ones such as employee discounts or free trips.

9. The training must be general and benefit the worker industry wide and NOT be training just for the company.

This is similar to factor number number one.

10. The screening process for the internship is NOT the same as for employment, and does not appear to be for that purpose, but involves only criteria relevant for admission to an independent educational program.

Generally, internship applicants should not complete job applications but rather internship applications that are drafted towards an educational experience.

11. Advertisements for the program focus on terms of the training, rather than employment.

The advertisements must be clear that the position is an internship and not a job so there is misrepresentation.

If you believe your “internship” does not meet the preceding 11 factors or you have any questions, contact our Award-Winning NY Employment Lawyers at (800) 893-9645 for a confidential consultation to understand your options and rights.


Disclaimer: 

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.