Before hiring a volunteer student intern, consider state and federal law. If the criteria described below are not met, you are required to pay the student at least minimum wage.
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Wage and Hour Review:
Should Your Volunteer Student Interns Be Paid?
Avoiding State and Federal Wage Liability
By Christopher W. Olmsted
A college student contacts the manager of your marketing department and inquires whether she may volunteer as a student intern for the fall semester. She is an upperclassman majoring in journalism and she is familiar with your design software. She could really help with the backlog of work in the department, including filing, some bookkeeping, and a little bit of writing. You can’t beat the price. Should you take her up on her offer?
Before hiring a volunteer student intern, consider state and federal law. If the criteria described below are not met, you are required to pay the student at least minimum wage.
Federal Criteria
The Supreme Court has held that the words "to suffer or permit to work," as used in the Fair Labor Standards Act (FLSA) to define "employ," do not make all persons employees who, without any express or implied compensation agreement, work for their own advantage on the premises of another. Whether trainees or students are employees of an employer under the FLSA will depend upon all of the circumstances surrounding their activities on the premises of the employer. According to the Department of Laborr, if all of the following criteria apply, the trainees or students are not employees within the meaning of the Act:
1) The training, though it may include actual operation of the employer’s facilities, is similar to training that would be given in a vocational school.
2) The training is for the benefit of the student.
3) The student does not displace regular employees, but works under close observation of a regular employee.
4) The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his operations may even be impeded.
5) The student is not necessarily entitled to a job at the conclusion of the training period.
6) The employer and the student understand that the student is not entitled to wages for the time spent training.
(See: DOL Volunteer Factors)
California’s Additional Criteria
The California Division of Labor Standards Enforcement (DLSE) adds the following criteria:
7) Any clinical training is part of an educational curriculum.
8) The trainees or students do not receive employee benefits.
9) The training is general, so as to qualify the trainees or students for work in any similar business, rather than designated specifically for a job with the employer offering the program. In other words, on completion of the program, the trainees or students must not be fully trained to work specifically for only the employer offering the program.
10) The screening process for the program is not the same as for employment, and does not appear to be for that purpose, but involves only criteria relevant for admission to an independent educational program.
11) Advertisements for the program are couched clearly in terms of education or training, rather than employment, although the employer may indicate that qualified graduates will be considered for employment.
These requirements are more rigorous than most employees realize. The California DLSE has taken a particularly stringent view towards the second requirement, finding in many cases that the volunteer has displaced work done by regular employees. In the hypothetical, the journalism employee is performing filing and bookkeeping duties that arguably a regular employee may otherwise perform.
Further, it is challenging to establish that the employer derives no immediate benefit from the activities of the trainee. In the hypothetical, the employer may arguably be seen to benefit from the work product prepared by the volunteer student if it were to incorporate the writings into its published materials.
If in doubt, it is a better practice to either pay the student minimum wage, or, alternatively, not take on the volunteer at all.
Contact Chris Olmsted at cwo@barkerolmsted.com or (619) 682-4040 for assistance with these and other wage and hour issues.
Download entire September 2009 Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2009 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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