The Unpaid Intern: Can’t LiveThe Unpaid Intern: Can t Live With Them, But Can’t Live 

Without ThemN C d J dith E d jNancy Cooper and Judith Endejan

Garvey Schubert BarerMay 29, 2014

Use of Unpaid Internsin Public Media

Purpose:Purpose:• Provides stations with additional support

i f j li d bli• Trains future journalists and public broadcasters

• Identifies future talent• Can save money if done righty g• Brings new energy and ideas

Level of Internships in 2013*Level of Internships in 2013

• PAID – 52 2 percentPAID  52.2 percent• 72.9 percent in for‐profit, private sector• 16.4 percent in non profitsp p• 10.6 percent in government

• UNPAID – 47.8 percentUNPAID  47.8 percent• 38.1 percent in for‐profit, private sector• 40.7 percent in non profits• 21.1 percent in government

* https://www.naceweb.org/s06262013/unpaid‐internship‐FLSA‐guidelines.aspx

Before Your StationBrings On Interns:

• Develop a formal internship or volunteer planDevelop a formal internship or volunteer plan• Make sure it complies with local, state and federal regulationsfederal regulations

• Develop agreements for interns and l i h h l ifvolunteers to sign on at the outset that clarify 

the classification• Decide “paid” versus “unpaid”

Risks of Using “Unpaid Interns”Risks of Using  Unpaid Interns

• They could be subject to the Fair LaborThey could be subject to the Fair Labor Standards Act (FLSA)

• They must be paid minimum wage and • Are subject to overtime laws if they receive more than “nominal” stipend and do not qualify under strict FLSA“trainee” criteria

Unpaid Intern Risks Cont’dUnpaid Intern Risks Cont d

• BUT unpaid internships with nonprofit charitable organizations and in the public g psector are exempt from the FLSA IF

• They are classified as “volunteers” without expectation of compensationTh t ib t t li i h it bl i i• They contribute to religious, charitable, civic or humanitarian purpose of nonprofit organization

DOL and “Ordinary Volunteerism”DOL and  Ordinary Volunteerism• Nature of the entity receiving the services (nonprofit for 

instance)instance)• Compensation of any sort, such as money, room & board, 

perks, etc.)• Expectations of benefits in the future• Whether the activity is less than a full time occupation• Whether regular employees are displaced• Whether the services are offered freely without pressure or 

coercion andcoercion, and• Whether the services are of the kind typically associated with 

volunteer work [reference: DOL Opinion Letters FLSA 2000‐18 and FLSA 2006‐4]

DOL and “Ordinary Volunteerism” Cont’d

• BUT volunteers working in non‐profit’s “commercial sector” (i e station store) are notcommercial sector  (i.e. station store) are not exempt from FLSAA h l /i i• At start have volunteer/interns sign an agreement acknowledging they expect no 

ti d th ill f dicompensation and they will perform ordinary voluntarism

• “Volunteers” may be paid volunteer expenses, reasonable benefits and a “nominal fee” *

DOL and “Ordinary Volunteerism” Cont’d

• “Nominal fee” < 20% of pay a worker wouldNominal fee  < 20% of pay a worker would be paid to perform the service and cannot be tied to productivity/hours workedtied to productivity/hours worked

• A “nominal fee” of > $600 per year requires a 1099 form1099 form

*29 C.F.R. 553.106

Other Considerations forInterns and Volunteers

• Be aware (and certain) of which classificationBe aware (and certain) of which classification you are using

• Worker’s compensation issues• Worker s compensation issues• Treatment under existing employment policies (i i di i i i i h )(i.e. anti‐discrimination, anti‐harassment)

• Train regular station employees on treatment of interns or volunteers

So Who Really Should ybe an Intern (as Opposed

to a Volunteer)?to a Volunteer)?

d• Students• Individuals seeking experience but no pay

StudentsStudents

• School Credit• Planned program of job training and work experience appropriate to student's abilities

• Training related to pre‐employment and employment skills

• Includes a sequence of activities that build upon one• Includes a sequence of activities that build upon one another, increasing in complexity

• Structured to expose student to all aspects of an industry and develop broad, transferrable skills

Students Cont’dStudents Cont d

• Learning experience must include real orLearning experience must include real or simulated tasks or assignments that develop higher order critical thinking and problemhigher order critical thinking and problem solving skills.

• Written Agreement with school and intern• Written Agreement with school and intern• Signed by everyone

C ti i h l ti dit• Compensation is scholastic credit• Included in the written agreement

Work Experience OnlyWork Experience Only

• Should be similar to vocational school;Should be similar to vocational school;• Benefit for the intern, not the station;

di l l l• Do not displace regular employees;• Work under their supervision

• Station derives no immediate benefit from the activities of the intern;

• On occasion the operations may actually be impeded

Work Experience Only Cont’dWork Experience Only Cont d

• Intern not entitled to a job at the conclusion of the internship; andof the internship; and

• Written agreement signed by all no entitlement to wages for time spent inentitlement to wages for time spent in internship.

Employee?Employee?

• An intern will be considered an employeeAn intern will be considered an employee (covered by wage and hour law) if:

• Provide essential services to stationProvide essential services to station• Working in a position where someone is normally paid• After internship a paid employee is hired to complete the same work

• Other people are being paid (or have been paid) to do the same or similar workthe same or similar work.

DOL Test for InternDOL Test for Intern

• The training, even though it includes actualThe training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction.

• The training is for the benefit of the trainees.• The training does not displace regular employees, 

but work under their close observation.

DOL Test for Intern Cont’dDOL Test for Intern Cont d

• The employer that provides the training derives noThe employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded.

• The trainees are not necessarily entitled to a job at the conclusion of the training period: and

• The employer and the trainees understand that the l f htrainees are not entitled to wages for the time 

spent in training

SummarySummary

• Both nonprofit unpaid interns and volunteersBoth nonprofit unpaid interns and volunteers are exempt from FLSA requirements and both can receive small stipends but it is less risky tocan receive small stipends but it is less risky to have “volunteers.”

• So long as you still pay attention to meeting the “tests”So long as you still pay attention to meeting the  tests

Summary Cont’dSummary Cont d

• Bottom line for non‐profits wanting to use “unpaidBottom line for non profits wanting to use  unpaid interns” is to classify them as volunteers if volunteer criteria met, rather than call them an unpaid intern subject to strict FLSA “trainee” test

• What if you want to pay a bigger stipend to get the best summer intern?  This could classify that summer intern as an “employee” subject to minimum wage laws UNLESS the intern meets six part test under DOLlaws UNLESS the intern meets six part test under DOL guidelines

Why Should You Care?Why Should You Care?

$$$$$$$$$$$$•$$$$$$$$$$$$

Why Should You Care?Why Should You Care?• Lots of Lawsuits Recently [35]• Penalties

• Depending on state – could be as much as treble p gdamages

• Back Wagesg• May have to retroactively pay for all the time the intern worked

• Back Overtime • Have to calculate and guesstimate overtime owed

Why Should You Care?Why Should You Care?

• Back benefitsBack benefits• 401(k) contributions• Cost of medical insurance

• Bad publicity• Increased scrutiny• Increased scrutiny• Loss of ability to have interns

Law Suits – Common ThemesLaw Suits  Common Themes 

• Interns doing work side by side withInterns doing work side by side with employees

• Not enough educational benefit• Not enough educational benefit• Hiring an employee to replace intern• Duties performed by intern are essential to the nature of the business

• Writing code in a software business• Editing photos in a fashion magazine

Law Suits – CommonThemes  Cont’d

• Allowing the intern to finish the posting – thenAllowing the intern to finish the posting  then hiring them as an employee

• Into the exact same position with the same dutiesInto the exact same position with the same duties

• Promoting the intern to a new positionC d i i th t b fit f th• Company deriving the most benefit from the interns work

N h i b fi i f h i h• Not the intern benefiting from the experience to the Company’s detriment

How to Keep Your Intern an InternHow to Keep Your Intern an Intern

• Written programWritten program• Requirements for acceptance• Requirements for performanceq p• Written terms with signed agreement

• EducationalEducational • Program in conjunction with an academic institution• Written agreement 

How to Keep Your Intern an Intern Cont’d

• Clearly defined job responsibilitiesClearly defined job responsibilities• Define the scope• Monitor to make sure not exceeding the limitsg

• Make sure there is a practical experience componentcomponent

• Not just a filing clerk

• Do not pay anyone to do the same or similar• Do not pay anyone to do the same or similar job

For your timeFor your time