The Department of Labor’s Wage and Hour Division (WHD) has issued a fact sheet to help for-profit private sector employers determine whether they need to pay their interns minimum wage and overtime under the Fair Labor Standards Act (FLSA). As noted in the fact sheet, internships and training programs in the private sector are often considered “employment” subject to overtime and minimum wage requirements unless the intern works for his or her own educational benefit. In order to qualify for this limited exception, the internship must meet a six-factor test:

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

According to the fact sheet, the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience.

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

In essence, the more the internship provides the individual with skills that can be used in multiple employment settings, as opposed to skills particular to one employer’s operation, the more likely the intern would be viewed as receiving training.

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

If the employer would have hired additional employees or required current employees to work additional hours but for the presence of interns, the internship better resembles an employment relationship. On the other hand, if the employer provides shadowing opportunities where the intern performs no or minimal work, then the scenario more closely resembles an educational experience.

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.

As explained in the fact sheet, if the intern receives the same level of supervision as the employer’s regular workforce, this would suggest an employment relationship, rather than training.

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.

The fact sheet notes that the internship should be for a fixed duration, and not be used as a trial period in which the employer evaluates the intern’s work performance for future work.

If all of these criteria are met, an employment relationship is not deemed to exist, and FLSA requirements do not apply. As with most scenarios under the FLSA, however, each situation should be evaluated on a case-by-case basis.