Intern or Employee? It Depends on Whether They Hinder or Help

By Carmon M. Harvey

Gone are the days where the young people of the world are willing to work for peanuts (or less) to beef up their resumes with “internships.” They now increasingly are insisting – often through litigation – on being paid a minimum wage and overtime for that experience.

As my colleague, Dan O’Meara, recently was quoted in a Forbes.com article on this topic, “No good deed goes unpunished.”

While we can question whether kids these days have any work ethic and whether offering those “kids” the opportunity to put in long hours for little or no pay is really a “good deed,” the idea that individuals should be paid for work performed is not a new or novel concept.

The big question: Are they “interns,” or employees?

The Fair Labor Standards Act has always required that employees be paid for all hours worked. (To be “employed” under the FLSA means to “suffer or permit to work” – it isn’t much of a stretch to say that interns often are “suffering” in one way or another.)

And, lawsuits by interns seeking back wages for failure to pay minimum wage and overtime during their “internships” have recently been on the uptick, as you may have seen in the news about Conde Nast, Fox Searchlight, and Hearst Corporation, among others.

So the question for employers with internship programs becomes – are these kids really “interns” or are they “employees”? The answer, at a very basic level, is determined by whether they are more of a hindrance than a help. If the former, it’s more likely that they are an intern; if the latter, you’d probably better get the checkbook out and get them paid.

The unfortunate side effect of this may be that employers who used to provide real life experience to those “kids” may be less inclined to create an internship program that passes muster under the FLSA and more inclined to just do away with the program all together. We’ve already seen that with Conde Nast., which may not bode well for our workforce down the line as more and more young people graduate college with little to no exposure to the real-life work scenario.

Volunteers must be paid, too

And, just to be clear, the notion that employers must pay individuals for work “suffered” applies to “volunteers,” too.

If you are a private employer and think you’re lucky enough to have found some generous individuals to “volunteer” to do anything at your facility … think again. The odds of “volunteer” being a legitimate classification in these circumstances is slim to none. (Pretty much only the public sector and nonprofits are permitted under the FLSA to have “volunteers.” But, nice try.)

So, for those “interns” who really are “employees,” the bottom of the totem pole isn’t as bad as it used to be. And, for employers who need to reclassify their “interns” as “employees,” the whole totem pole just got a little more expensive.

But paying a little minimum wage and overtime here and there beats defending a collective action brought by a bunch of disgruntled, underpaid, and overworked “interns,” don’t you think?

This was originally published on Montgomery McCracken’s Employment Law Matters blog.