With Memorial Day in the rearview mirror and the month of June upon us, many companies and organizations throughout the country are preparing to kick off the summer by welcoming an incoming cohort of summer interns.
Internship programs are a win-win for both employers and students: they enable employers to identify future talent and provide students valuable work experience and training. That said, employers choosing to offer such programs should take care to structure them properly to avoid any risk of liability under applicable federal and state wage and hour laws. Keep reading to learn the key wage-hour compliance issues and best practices for hosting interns this summer.
Most likely, yes—at least unless the internship is one where the intern mainly shadows and observes but performs little to no productive work. At least under U.S. Department of Labor Wage and Hour Division (WHD) guidance, internships generally are presumed to constitute an employment relationship under the federal Fair Labor Standards Act (“FLSA”)—and, therefore, an employer must pay wages to its interns—unless the internship satisfies the “primary beneficiary test.”
The seven-factor primary beneficiary test, adopted by the WHD in a 2018 Field Assistance Bulletin, No. 2018-12, examines the economic reality of the intern-employer relationship to determine which party is the “primary beneficiary” of that relationship. In other words, who benefits...
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