Recent opinion from California Division of Labor Standards Enforcement clarifies state’s position on unpaid internships
On April 7, California DLSE released an opinion letter addressed to a program called Year Up. Year Up places young people in internships in for-profit businesses as part of a year-long educational program. The internships are unpaid, though the interns do receive a small stipend for living expenses.
Even though the private for-profit businesses get some benefit from the work the interns do, the state approved the unpaid internship program.
Coincidentally, this opinion was released just five days after the publication of a New York Times article called “The Unpaid Intern, Legal or Not.”
Apparently, there has been a recent proliferation of unpaid internships and the federal and several state governments are taking notice. Generally, all people who work for for-profit businesses must be paid at least minimum wage. While there is an exception for interns (aka trainees), the exception is very narrow.
There are six criteria for unpaid interns that must be adhered to:
1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees;
3. The trainees do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion the employer’s operations may actually be impeded;
5. The trainees are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees understand that the trainees are not entitled to wages for the time spent in training.
According to the New York Times article, there are many incidences of paid workers being displaced by unpaid interns, interns being assigned non-instructional, menial labor, and much of the work being unsupervised.
Many employers argue that the DOL criteria need updating because they are based on a 1947 Supreme Court decision (a time when many internships were for blue collar production work).
