Intern or Employee? Determining Whether Interns are Entitled to Wages and Employee Benefits.

The following article is a guest contribution by Benjamin Haynes, Esq.   Haynes is a former Division 1 Basketball Player at Oral Roberts University and currently practices law in the State of Florida.

Currently, the Houston Astros are offering a full time unpaid internship to eligible college students. The internship requires the intern to handle extensive duties, as well as possess a plethora of qualifications. Further, the internship mandates that the student receive college credit for his/her participation in the internship program.

Here is a link to the internship: http://www.fangraphs.com/blogs/index.php/job-posting-astros-internship/

While most people, including interns, may believe that an employer offering college credit to an intern would relieve that employer of paying wages to that intern, that belief is false. The biggest hurdle with interns is that they are unaware of their rights under The Fair Labor Standards Act.

The U.S. Department of Labor (DOL) has determined that internships that are for non-profit organizations do not require employee wages. See, e.g., Fact Sheet #71, Internship Programs Under the Fair Labor Standards Act (April 2010).  Thus, an internship for a non-profit organization is just that, an internship. However, the DOL has determined that internships in the private sector for “for-profit” entities “will most often be viewed as employment.” Id. Further, the employers “must pay at least minimum wage and overtime compensation for hours worked over forty in a workweek.” Id.

There is only one situation that will excuse a for-profit entity employer from paying its interns. Id.  This one situation is determined by a Six Factor test for unpaid interns implemented by the DOL. If just one of the factors is not met, then an employment relationship is established. Id.  Thus, the test sets a very high burden on for-profit employers to overcome.

Each factor of the six-factor test is laid out below. To determine whether or not the Houston Astros unpaid internship is legal, I have analyzed each factor of the test as applied to the Houston Astros internship shown above. The analyzation is as follows:

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 (the more an internship is structured around a class room or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an educational experience).

Applied: While the internship itself will take place within the Astros facility, that alone is not enough to deem this factor as non-educational. What could deem this factor as non-educational is within the qualifications/minimum requirements section of the internship. The qualifications require the intern to “possess a high degree of discretion” Id., as well as advanced knowledge and specialized skills in complicated areas of work. Id.  These qualifications seem to be asking for an intern who already knows how to work in the field, and can work on his/her own without having to be educated on the subjects.
This factor could very easily be argued in favor of the intern.

2. The internship experience is for the benefit of the intern.

Applied: This factor is the broadest of the six. It would be easy for an employer to find some justification that this internship would be for the benefit for the intern.
This factor will most likely never discredit a non-paid internship.

3. The intern does not displace regular employees, but works under close supervision of existing staff.

Applied: While we do not have enough facts to determine whether this internship would displace regular employees, we can determine whether or not the intern works under close supervision. The internship has various language which states that the duties for the intern will be to “assist the staff” Id., and “partner with the director.” Id.  This language would imply that adequate oversight would be available to the intern. However, as stated in Factor 1, the qualifications require that the intern “possess a high degree of discretion” Id., which would imply that the intern will be able to work on his or her own without supervision.
This factor could possibly go in favor of the intern.

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.

Applied: This factor will be extremely burdensome on the employer because of the various responsibilities required by the intern. For example, the duties of the intern include,  “Developing database-driven applications and reports” Id. as well as to  “assist the staff by performing occasional reporting, data mining, or other tasks.” Id.  It will be difficult for the employer to argue that these tasks won’t provide an immediate advantage to him or her.
The intern would most likely win on this factor.

5. The intern is not necessarily entitled to a job at the conclusion of the internship.

Applied: There is no language in the documentation for the internship opportunity that states the intern would be entitled to a job at the conclusion of the internship.
This factor will most likely be in favor of the employer.

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Applied: At the end of the internship posting, the document clearly states “I understand that this is an unpaid internship and I WILL receive college credit for my participation in this internship.” Id.
Therefore, this factor will be found in favor of the employer.

​While there are some factors that weigh in favor of the employer, this test is not a balancing test. If one of the factors is not met, then an employment relationship exists and there is a duty to pay wages to the intern. Based on the above, this proposed “internship” by the Houston Astros organization should be reclassified as an employment opportunity.

While this article is written to analyze whether the Houston Astros internship is legal or not, the article is not written to single out this organization. The purpose of this article is to bring to the surface the monumental problem of for-profit organizations depriving interns of compensation required under Federal law. Further, this article is written to provide adequate knowledge of what the law states in order for interns to know their rights, and for employers to become aware of their obligations.

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