Many college students and recent graduates will partake in summer internships in the coming months in New Jersey. Internship programs are a great way for students to become introduced to the working world and gain experience. Unfortunately, in recent years there have been numerous lawsuits filed accusing employers of taking advantage of energetic interns who are eager to work.

A number of employers decline to pay their interns due to a federal exclusion under which interns generally do not need to earn wages if the internship is an educational experience. However, if the employer stands to gain as much or more from the experience than the intern, the intern should probably be classified as a paid employee.

The U.S. Department of Labor states that workers can only be classified as unpaid interns if the internship role meets all of the following criteria:

• The role involves training that is similar to what would be offered in an educational setting.
• The role is designed for the intern’s benefit.
• The intern works under supervision of staff and is not displacing any regular employees.
• The employer does not receive any immediate benefits from the intern’s acitivities.
• The intern is not entitled to a job after the internship.
• The intern as well as the employer understand that the intern is not to be paid.

In general, a work experience is likely to qualify as a legal unpaid internship if the  program is structured around an academic experience rather than a business’s needs. When a business is dependent on the intern’s work, the intern probably should not be excluded from federal Fair Labor Standards Act rights to minimum wage and overtime.

Interns who feel that they are being exploited as free labor may be wise to seek employment law counsel.

Source: Forbes, “Unpaid Interns Lack Class, Says New York Court,” Betty Graumlich, May 16, 2013