With summer soon arriving, thousands of California high school and college students will soon be on summer break, which means now is the time many of them are furiously searching for an internship to put on their resume or college application. What students often don’t know however, is the difference between paid vs unpaid internships.
Internships And Employment Law
Many people, students and employers included, don’t realize that internships fall under fairly strict state and federal labor and wage laws. There is no shortage of employers that would love to have free labor, and it’s because of the abuse of the internship system in the past that there are such strict rules about them in California today.
Federal and state laws are very clear about, and sensitive, to the differences between paid vs unpaid internships. In fact, there is a specific set of requirements that an employer must meet for the position they offer to qualify as an unpaid internship.
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Guidelines Governing Paid vs Unpaid Internships
For unpaid internships to fall outside California and federal minimum wage and overtime requirements, they must satisfy a six part criteria, as follows:
- The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school.
- The training is for the benefit of the students.
- The students do not displace regular employees, but work under their close observation.
- The employer derives no immediate advantage from the activities of the students, and on occasion the employer’s operations may be actually impeded.
- The students are not necessarily entitled to a job at the conclusion of the training period.
- The employer and the students understand that the students are not entitled to wages for the time spent in training.
The six part criteria is applied in view of “all the circumstances” surrounding the intern’s activities to determine whether an intern is an employee or exempt from California minimum wage and overtime laws.
It is not uncommon for employers, when learning about the difference between paid vs unpaid internships and the requirements of the latter, to either abandon their plan altogether, or simply offer a paid internship with fewer hours than originally expected.
While all employers have a need to keep costs low and free help would certainly go a long way to obtain that goal, the fact is that for an employer, true unpaid internships are a pain in the ass.
Interns require training, supervision, and constant review with constructive feedback. This requirement typically hinders regular employees and takes resources away from the task at hand.
In other words, internships are almost always unprofitable. While it is appropriate for an intern to do routine tasks of operating a business, like answer the telephone, a substantial part of internships is the hands-on training by another employee.
When considering paid vs unpaid internships, understand that the goal in both cases is the education of prospective new talent. However, only with paid internships can employers expect to reap any kind of business benefits whether short and/or long term.