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The legality of internships

Heather Huhman: What is the legal definition of an intern?

 

Marcia McCormick: There isn’t a single legal definition of an intern, in large part because there are many laws, both state and federal, that govern a relationship where people perform labor or services for others. 

 

Mostly, an intern gets defined in the negative by statutes that protect people in other working relationships—usually employees. Most people who provide services or labor for others are considered employees, and those tend to be people who are paid an hourly or yearly wage. Others, who are usually paid by task, although sometimes paid a fee for a set period of time, are self-employed and considered independent contractors. 

 

Interns are usually thought of as people currently engaged in a field of study at an educational institution who provide labor or services related to their fields in order to learn more about those fields. In other words, an internship is primarily designed to educate the intern. Sometimes interns are paid a low wage, sometimes they are unpaid but receive credit toward their diploma or degree, and sometimes they get neither pay nor credit. In other words, sometimes, they are volunteers. Often, but not always, the entity or person that the intern works for has a structured relationship with the educational institution or provides some sort of feedback to the school.

 

HH: What characteristics of an unpaid internship make the internship illegal?

 

MM: An unpaid internship itself won’t be illegal unless the person has no choice but to participate—that’s slavery—or the labor or services themselves are illegal, like the sale of controlled substances without a license. People may be misclassified as interns, though, when they should be considered employees. If a person is actually an employee, the person will be entitled to certain things, like a minimum wage, time and a half pay for hours over 40 worked in a week, freedom from discrimination (although interns may be protected through the educational institution), the right to bargain collectively, and other things which may even vary by state. If the employer hasn’t provided those things, the employer may be liable for damages or may be fined, depending on what statute is violated.

 

(Note: More on this can be found on Willy Franzen’s One Day, One Internship blog post here.)

 

HH: Are there characteristics of paid internships that make them illegal? If so, what are they?

 

MM: The same is true for paid internships as is true for unpaid internships, although pay may suggest that a person is more likely to be an employee than an intern. 

 

HH: How are interns categorized if they receive a stipend at the end? Or is this even legally allowed?

 

MM: It all depends on what the main point of the work relationship is. Pay may be one factor. If the intern does the same task as a regular employee and is paid the same amount, the intern is more likely going to be considered an employee. The real keys will be (1) the type of work performed and whether it’s the kind of work that regular employees do and (2) any link between the work and the person’s education or school. 

 

It might be possible, though, for an intern to be considered an independent contractor rather than an intern if there is a stipend at the end. That won’t make much of a legal difference, though. Those who contract with independent contractors have very few legal obligations other than to pay what is owed under the contract.