Internships have been around in one shape or another for ages. The arrangement these days ideally involves enabling the intern to learn through doing rather than from a textbook. It also allows businesses to scout young new talent that they wish to hire at a later date.
The federal government rolled out new rules in 2018 for businesses that offered unpaid internships. These are more friendly towards employers and easier to measure than past standards for avoiding non-compliance under the Fair Labor Standards Act (FLSA). Since California does not have its own guidelines for internships, it uses federal rules.
7 factors to weigh for an unpaid internship
Compliance is measured by seven factors that make up the primary beneficiary test. These are:
- There is no promise said or implied of pay for the work.
- The intern receives training similar to what they would get in a classroom.
- The internship is part of their educational training, and they receive course credit.
- The internship corresponds to the academic calendar and commitments.
- The internship has a stated time limit.
- The internship provides support and assistance to employees rather than displacing a paid worker.
- The internship does not have a guaranteed employment offer at its conclusion.
Standards will vary
Different businesses have different rules, and it is unlikely that one will meet all seven requirements. Moreover, there is no single definitive factor in the primary beneficiary test. These details prompt some businesses to avoid the risk of non-compliance by paying minimum wage and overtime. This, however, is not necessary if an attorney familiar with business and employment law drafts a job description.