Use Caution When Hiring Interns in California

Summer is around the corner.  If you are interested in hiring interns in California, the Department of Labor considers six factors in determining whether an intern is entitled to wages in exchange for his or her services. The factors include:

1.) Training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school.
2.) The training is for the benefit of the interns or students
3.) The interns or students do not displace regular employees, but rather work under their close supervision
4.) The employer derives no immediate advantage from the activities of the interns or students, and on occasion the employer’s operations may be actually impeded
5.) The interns or students are not necessarily entitled to a job at the conclusion of the training period
6.) The employer and the interns or students under that the interns or students are not entitled to wages for the time spent in training

According to a recent article written by the law firm, Hopkins and Carley, the Department of Labor also clarified the agency’s position with respect to three issues that have disqualified many persons from intern status in the past:

• Occasional performance of work normally done by employees not prohibited– In the past, the DLSE has taken the position that performance of any work which could be performed by an employee would defeat intern status and require the payment of wages. The Opinion Letter clarifies that the performance of occasional and incidental work tasks will not preclude intern status if the work performed is primarily for the benefit of the intern and does not displace other workers.
• Close supervision required– Interns require and should receive extensive supervision from the employer. The likelihood of a person qualifying as a bona fide intern decreases in direct proportion to the amount of independence and autonomy with which he or she performs in the workplace; and
• No immediate benefit to employer– While employers should derive no immediate benefit from the work of an intern, the DLSE now permits employers to realize benefits that may accrue gradually over time, particularly toward the end of an internship when the intern inevitably begins to apply the knowledge and skills acquired during the internship.

Hopkins and Carley suggests the Department of Labor’s change in position is good news for employers. However,  companies should continue to exercise caution when hiring interns.  Also, applicable laws may require companies to pay interns at least the minimum wage for their work.

For further information, check-out the California Department of Labor fact sheet #71.

If anyone has questions of a general nature regarding this topic, please feel free to contact me.  For specific legal advice, contact a California employment law attorney.