DOL Changes Course on When an Intern Should Be Paid
In the last few years, we have
discouraged our clients — including many of the non-profit organizations that
we represent on a pro bono basis — from engaging unpaid interns. Under the
Department of Labor’s old six-factor test, whether a position required
compensation has been based on a totality of the circumstances analysis
focusing on the benefit gained by the employer from the intern’s work.
Practically, this resulted in most internship positions requiring compensation.
On January 5, 2018, the DOL announced it
was adopting the “primary-beneficiary” test that has been adopted by a number
of circuit courts. Under the seven-factor “primary-beneficiary” test, the
ultimate question is whether the primary beneficiary of the opportunity is the
employer or the intern. The factors identified include whether the opportunity
is understood to be uncompensated, provides training, entitles an intern to
academic credit, corresponds to the academic calendar, is limited in duration,
complements and does not displace paid employees, and does not guarantee full-time
While employers should see this change as an
effort by the current administration to encourage the growth of unpaid
internships, employers should still be careful when engaging unpaid interns.
The college student who spends most of his time getting coffee and doing
clerical tasks should be paid for his work. Internship programs should provide
meaningful training opportunities if the internships are going to be unpaid. If
an employer decides to offer unpaid internships, we recommend partnering with a
school who will provide student interns class credit and coordinating with the
school so the internship corresponds with their class schedule.