Digging Deeper:

Narrow Circumstances Allow Unpaid Internships


Nevertheless, under certain narrow circumstances, trainees and interns are not considered employees.   The inquiry is fact-specific.   There are six factors used to determine whether a trainee is not within the definition of employee and thus not covered by the FLSA.
  • the training is similar to that which would be given in a vocational school, even though it includes actual operation of the facilities of the employer; 
  • the training is for the benefit of the trainee; 
  • the trainees do not displace regular employees, but work under close observation;
  • the employer that provides the training derives no immediate advantage from the activities of the trainees and on occasion his operations may actually be impeded; The trainees are not necessarily entitled to a job at the completion of the training period; and
  • the employer and trainees understand that the trainees are not entitled to wages for the time spent in training.210
Generally, the more a program is structured around an academic experience, the more likely the internship will be viewed as an extension of the individual’s education rather than an employment relationship.  If the skills developed can be used in multiple settings, as opposed to just for the employer’s operation, it is more likely the intern or trainee is not an employee under the FLSA.211 However, if the program is a mere continuation of the employer’s actual operations, and the employer benefits from a trainee performing productive work, then the fact that they may be receiving some benefits in the form of a new skill or improved work habits does not exclude them from the FLSA. Furthermore, if an employer uses trainees to augment its existing workforce, they are employees.212
There is a different rule for trainess or interns who are also non-profit volunteers. 
The FLSA makes a special exception under certain circumstances for individuals who volunteer to perform services for a state or local government agency and for individuals who volunteer for humanitarian purposes for private non-profit food banks. WHD also recognizes an exception for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations. Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible. WHD is reviewing the need for additional guidance on internships in the public and non-profit sector.213
  • 210. See also U.S. Department of Labor, Field Operations Handbook 10b99(b), available at http://www.dol.gov/whd/FOH/FOH_Ch10.pdf; Reich v. Parker Fire Protection District, 992 F.2d 1023, 1026-27 (10th Cir.1993); Chellen v. Pickle, 344 F.Supp. 2d 1278, 1292 (N.D. Okla 2004). The trainee exemption does not come from FLSA. The agency enforcing the FLSA, the U.S. Department of Labor’s Wage & Hour Division and interpreting case law have determined the six criteria to consider.
  • 211. U.S. Department of Labor, Wage and Hour Division, Fact Sheet #71, available at http://www.dol.gov/whd/regs/compliance/whdfs71.pdf
  • 212. Id.
  • 213. Id.