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When should internships be paid vs. unpaid?

With summer upon us, many students are anxious to find work or an valuable internship, and employers are excited to offer opportunities to eager workers. However, before a student decides to take an internship without pay, it’s important to understand whether he or she is rightfully entitled to pay, and under what circumstances it is permissible for an employer to offer an unpaid internship.

This past January, the Department of Labor adopted new guideline for determining whether interns must be paid. The “primary beneficiary” test looks at the worker as a whole, rather than going through a six-part test (as was previously required), to see whether pay is required. Ultimately, whether the work is done for the primary benefit of the worker or for the company is the determining factor. In situations where the student reaps the main benefit, unpaid internships are more likely to be considered valid.

The factors to be considered include: Is there an expectation of payment? Is the intern receiving training similar to that given in an educational institution? Will the intern receive credit? Is there an expectation of employment at the end of the internship? Does the internship correspond to the academic year? Does the intern displace employees who would typically receive wages?

Click here for the complete list of factors.

The failure to pay an intern may violate the Fair Labor Standards Act (“FLSA”). Before you or a loved one takes an internship, it’s a good idea to determine whether you are entitled to pay.

For more information or for a confidential consultation, please contact the dedicated Atlanta wage and hour lawyers at Buckley Beal, LLP.

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