Employers often have legal questions about how to hire an intern, especially about whether to hire paid or unpaid interns.
While hiring interns, employers should look up the federal Fair Labor Standards Act (“FLSA”), which is the federal wage and hour law that sets forth the legal requirements for compensation for employees, including paid interns, minimum wage and overtime pay.
In addition, most states including New York have their own laws regarding pay, which oftentimes closely track the FLSA.
In both the federal and state context, wage and hour laws apply only to “employees”. Thus, to determine whether an intern is entitled to compensation under the FLSA, it must be determined whether the intern is an employee for purposes of the FLSA. In the “for-profit” private sector, it is difficult to establish that an intern is not an employee.
The core issue around compensation while hiring an intern is whether the internship program is primarily benefiting the student or the employer.
To be considered an unpaid intern, the student intern, and not the employer, should be receiving the primary benefit of the relationship.