Do you have to pay interns?
The U.S. Fair Labor Standards Act (FLSA), which applies to all companies that have at least two employees directly engaged in interstate commerce and annual sales of at least $500,000.00, severely restricts an employer’s ability to use unpaid interns or trainees. It does not limit an employer’s ability to hire paid interns. You don’t have to pay interns who qualify as learners/trainees.
The U.S. Department of Labor has outlined six criteria for determining trainee status:
- Interns cannot displace regular employees.
- Interns are not guaranteed a job at the end of the internship (though you may decide to hire them at the conclusion of the experience).
- Interns are not entitled to wages during the internship.
- Interns must receive training from your organization, even if it somewhat impedes the work.
- Interns must get hands-on experience with equipment and processes used in your Industry.
- Interns’ training must primarily benefit them, not the organization.