Now that summer is here, companies frequently ask us about hiring unpaid interns. Can you hire unpaid interns? What are the rules? What are the risks? The Department of Labor (“DOL”) issued some guidance on the factors to consider in Fact Sheet #71 (download here: whdfs71). The DOL uses a 6-part test to determine whether minimum wage laws and other provisions of the Fair Labor Standards Act (“FLSA”) apply to an what you may be calling an “unpaid intern”:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under close supervision of existing staff;

4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Companies considering hiring unpaid interns should use caution and establish policies and clear written understandings with the interns prior to starting an internship program. Companies might consider using an unpaid internship agreement template tailored to your particular template, along with counseling and education of your staff and interns so that everyone clearly understands the applicable rules and expectations from your program. Of course, each particular situation deserves its own consideration, and nothing here constitutes legal advice 🙂