Many people who are just starting out in their field apply for unpaid internships in order to get their foot in the door and gain experience. Internships are supposed to be valuable learning experiences, but many companies take advantage of interns. Because of this, the Department of Labor (DOL) issued guidelines in 2010 that limited the ability of for-profit companies’ to hire unpaid interns. But now, the DOL has adopted new unpaid internship guidelines.
The Six-Factor Test Established in 2010
In the past, the DOL required private employers to apply six criteria when determining whether an individual should be classified as an unpaid intern or employee. A worker could only be classified as an intern if these conditions were met:
- The intern will receive training similar to what is provided in educational institutions
- The training benefits the intern
- The intern is not replacing an employee, but rather is working closely with an employee
- The employer did not directly benefit from the intern’s activities
- The intern is not guaranteed a job after the internship is over
- The intern understands that he will not be compensated
Establishing this test made it harder for companies to get away with hiring unpaid interns and using them as regular employees.
The Primary Beneficiary Test
The DOL released guidelines on the new primary beneficiary test in January of 2018. Now, employers are no longer forced to meet certain conditions to prove that a worker should be classified as an unpaid intern. Instead, the DOL requires employers to assess their current situation to determine if the intern or the employer is benefitting more from the working arrangement. The DOL asks employers to consider seven factors when assessing their situation, including the extent to which:
- The intern and employer understand that the intern will not be compensated
- The internship provides some level of training that is similar to what is found in educational institutions
- The internship is related to the intern’s educational program
- The internship accommodates the intern’s academic calendar
- The intern’s work supports, but does not replace, the work of employees
- The duration of the internship is limited to a time period that provides the intern with learning
- The intern and the employer understand that there is no job offer guaranteed at the end of the internship.
The new test provides employers with more flexibility when it comes to hiring unpaid interns. Instead of having to meet certain conditions, employers are now asked to simply assess whether or not the intern is the “primary beneficiary” of the internship. This is a much more subjective test, which means employers may feel more free to hire unpaid interns instead of regular employees.
If you are not being compensated fairly, seek legal representation from Armstrong & Vaught, P.L.C. at once. Our experienced attorneys will fight tirelessly to hold your employer accountable and recover the compensation you deserve. Call us now at 918-582-2500, toll free at (800) 722-8880, or contact us online for a free consultation with a skilled attorney.