Unpaid Internship SOP

Procedure#:HB SOP 99

Function:Management Policies

Implementation Date:041823

 

Policy/Purpose: To ensure that the FLSA test for unpaid internships is met in order for interns to be unpaid.

 

Procedures:

The FLSA requires “for-profit” employers to pay employees for their work.  Interns and students, however, may not be “employees” under the FLSA—in which case the FLSA does not require compensation for their work.  The following 7 factors must all be met to qualify for an unpaid internship: 

 

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, expressed or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

If all 7 factors are not met then the internship will need to be paid.



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