DOL Clarifies Unpaid Internships

Speaking of unpaid internships, the Department of Labor has just issued a new fact sheet regarding unpaid interns.

This new fact sheet comes shortly after the Division of Labor Standards Enforcement (DLSE) in California published an opinion letter regarding unpaid interns. Although the situation was specific to a non-profit educational training program for under-served communities, the DLSE offered an opinion that can be used broadly as it departed from the standard California 11-factor test and instead determined that the less onerous Federal 6-factor test should be applied.

The DLSE opinion letter further explained:

In the past, DLSE has articulated an “11-factor test” which consisted of the 6 factors from DOL’s criteria interpreting federal law, plus 5 additional factors which are identified in Wilcox, California Employment Law, §104[1](e)3 (See also, DLSE OLs 1998.11.12, 1993.10.21) However, the 5 additional factors do not appear to be based upon any source statute or regulation from which they derive nor are the additional factors identified with specific case law. More recently, DLSE applied a 6-factor test for the trainee/intern exemption under an economic realities test for determining an employment relationship where the 6 factors differed, in part, from the above-stated 6 factors used by D01.4 (DLSE OL 2000.05.17)

The six factors (as explained in the DOL fact sheet) are:

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.

I realize that this is a lot to take in. But it does actually make a great deal of sense.

And even though I’m no longer in California, I do find it encouraging that California, at least in this situation, is taking steps to work in conjunction with Federal guidelines.

[via Shaw Valenza LLP]