BCN Services

Most interns must be paid, but federal law allows certain exceptions

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Note: This article was updated with new laws and rules in 2019. Read the post here

The summer internship season is upon us and if you’re considering bringing an intern onboard you may be asking yourself whether or not you must pay him or her.

Generally speaking, internships in the for-profit business sector are most often viewed by the U.S. Department of Labor and the Internal Revenue Service as employment, and therefore, the intern must receive at least minimum wage and overtime for hours worked over 40 in a workweek.

There are some exceptions to this general rule.  The Department of Labor has set forth a test with six criteria that should be considered when determining whether or not an intern should be paid:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training given in an educational environment;

2. The internship experience is for the benefit of the intern;

3. The intern does not displace regular employees, but works under the close supervision of existing staff;

4. The employer that provides the training derives no immediate advantage from the activities of the intern and, on occasion, its operations may actually be impeded;

5. The intern is not necessarily entitled to a job at the conclusion of the internship; and

6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. (Source: DOL Fact Sheet #71)

If all of the above rules are met, under the Fair Labor Standards Act there would be no employment relationship and minimum wage and overtime regulations would not apply.

Because this exclusion does not apply in all circumstances, we encourage you to contact BCN Services at 1-800-891-9911 for help in determining whether or not your summer intern should receive regular wages.



Alicia Jester, Manager Benefits and Payroll