Does Your Internship Program Pass the Test?

As employers begin to prepare for spring semester and summer break internships, their first step should be to review the “primary beneficiary test” adopted by the Department of Labor (DOL) on January 7. The test will be used to determine whether new hires are bona fide interns or employees. The test takes into account seven factors, including whether there is an expectation of no compensation, training from the internship is similar to that obtained in an educational environment, the connection between the internship and formal education programs, the ability to accommodate to an intern’s academic calendar, the extent to which the work complements rather than displaces the work of paid employees, and the extent to which the internship is understood to be nonpermanent. “This new test expands the safe harbor from the Fair Labor Standards Act (FLSA) liability for employers sponsoring internship programs, but doesn’t eliminate the risk altogether,” says Veena Iyer, a labor and employment lawyer at Nilan Johnson Lewis. Iyer encourages employers to ensure intern programs serve an educational purpose and obtain written acknowledgment from interns that they will not be paid or are guaranteed employment. To speak with Veena Iyer about the new DOL guidance and FLSA-compliant employment programs, contact her at viyer@nilanjohnson.com or 612.305.7695.

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