Just this week, (January 5, 2018), the Department of Labor (“DOL”) rescinded guidance that disincentivized the use of unpaid interns by for-profit businesses and released replacement guidance that opens up new opportunities for students and businesses.
According to employer reports, the prior DOL guidance divested employers of any motivation to take on an unpaid intern.
Under the prior guidance, for an unpaid internship to be excluded from the Fair Labor Standard Act (“FLSA”) wage requirements, the employer providing the internship must receive “no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.” Also, the now rescinded guidance provided that the internship must be for the benefit of the intern, as opposed to allowing for some mutual benefit to the employer. In addition, the prior guidance provided that the intern must work “under close supervision of existing staff,” thus further disadvantaging businesses that take on unpaid interns.
The new guidance opens up opportunities for both businesses and students by allowing students to take on more useful roles in the organization, which enhances the students’ learning experience while also incentivizing businesses to invest time in unpaid interns.
More specifically, the new guidance focuses more on the extent to which the intern and business understood and agreed that student would be interning without compensation. Most notably, the new guidance does not preclude unpaid interns from offering value to the organization and further does not require that operations be impeded. As opposed to requiring close supervision from staff, the new guidance states that the intern’s work should “complement” the work of paid employees.
A complete copy of the DOL’s new guidance may be found under “Fact Sheet # 71” at its website.
Some things have not changed between the old and the new guidance.
The DOL will continue to look to whether unpaid internships provide significant educational benefits to the intern and hands-on educational training. In order to be unpaid, internships must be part of an educational program and may not displace paid workers.
What does this mean for employers?
The new guidance creates an opportunity for you, as an employer, to work with unpaid interns to add value to your organization while also investing the future. With the barrier of a forced drain on business resources removed, there is nothing stopping business leaders from giving students the opportunity for a hands-on learning experience.
The Eastern Pennsylvania Employment Log (EPELog) is a publication of the KingSpry Employment Law Practice Group. Jeffrey T. Tucker, Esquire, is our editor-in-chief. EPELog is meant to be informational and does not constitute legal advice.