With the end of the school year just weeks away, this is the perfect time to think about hiring your summer interns. Intern programs can be beneficial for both the intern and the employer, and it’s important to be aware of your legal responsibilities.
Intern or Employee?
The Fair Labor Standards Act (FLSA) requires for-profit employers to pay employees for their services; however, interns and students may not be considered employees. As of 2018, the DOL employs the “primary beneficiary test” to determine the difference. The test encompasses seven factors that must be met to allow an intern to work without pay.
These seven factors are:
- Employer and intern have a clear understanding that there will be no compensation for the job
- Internship position is similar to training that would be provided in an educational venue
- Work experience is intended to benefit the intern's education, with associations to coursework or academic credit
- Intern does not displace regular, hired employees, instead working under the supervision of those employees
- Internship is flexible and works with the intern's academic schedule
- Internship is limited to the period of time when the intern is receiving beneficial learning
- Employer and intern both understand the intern will not receive wages for the time of the internship when it concludes
If the primary beneficiary test reveals that the intern is actually an employee, they are entitled to both compensation and overtime pay under the FLSA.
Texas Child Labor Laws
When hiring students under age 18 as interns (paid or unpaid), you must comply with Texas Child Labor Laws, which entail restrictions on hours of employment and permitted and prohibited occupations for specific age groups.
Federal child labor laws may also apply; for more information, consult the DOL Fair Labor Standards Act (FLSA) Child Labor Rules Advisor.
Once the individual reaches age 18, child labor laws no longer apply.
Policies and Procedures
Because interns are not considered employees, internships may sometimes be abused by both the intern and the employer. Interns may think that policies regarding attendance, dress code, workplace conduct, confidentiality, and other issues do not apply to them and may therefore take undue liberties. On the other side of the issue, supervisors may view interns as not being entitled to the same rights as paid employees, which could lead to unfortunate results. As the Society of Human Resources Management (SHRM) advises, “Employers should maintain order in their operations—and internships should be no exception. Periodic meetings between HR and interns and between HR and supervisors can help prevent inappropriate conduct or stop it before it gets out of hand.”
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