Today we will look at the right way and the wrong way to employ an unpaid intern.
The wrong way:
This job offer is questionably legal.
Under the Fair Labor Act:
"employees may not volunteer services to for-profit private sector employers. In the vast majority of circumstances, individuals can volunteer services to public sector employers. There is no prohibition on anyone employed in the private sector from volunteering in any capacity or line of work in the public sector."
B&B Sheet Metal intimates that they are seeking a student for their internship position. Theoretically, this student would gain practical training and CNC experience in exchange for contributiong CAD work to the company. Unlike many past examples, this arrangement is only legal in exchange for course credit.
Based on the Supreme Court ruling in Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947) The U.S. Department of Labor offers six guidelines for legal unpaid internship:
1. The training is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees or students;
3. The trainees or students do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion the employer’s operations may actually be impeded;
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.
If one or more conditions is not explicitly met, the intern qualifies as an employee and unpaid status is illegal
The provision of educational course credit negates any question concerning an intern's potential standing as an employee.
In a May 10, 1983, opinion letter, the Department of Labor determined that where students would receive college credits for performing an “internship… which involves the students in real-life situations and provides the students with educational experiences unobtainable in a classroom setting,” the interns would not be considered employees.
First, it falls on the employer to screen applicants for present enrollment in a related educational program. Any failure to do this is a violation of federal labor law. Second, the employer must make arrangements with applicable faculty or coordinators to compensate the intern with credit. Without a course credit arrangement the legality of the preceding internship posting is questionable due to a difficulty meeting guideline #4. The company would need to prove that the work done by the intern provides "no immediate advantage" to the company. Furthermore, it would be interesting to investigate whether the company is serious about accepting only current students or facilitating course credit.
For an example of a careful and thoroughly legal job posting, we can look to the following posting from luxury retailer Fendi:
Please note how carefully Fendi emphasizes the terms of employment:
"This is a non-paying internship and students **MUST** be able to receive school credit."This small disclaimer is all that is needed to avoid illegality. Through their attention to labor law and emphasis on proper internship terms Fendi has given us an example of best practice and, in this issue, has proven themselves a responsible corporate citizen.