In these tough times, when employers are looking for every possible way to save money and students are desperate for jobs, be careful about practices that might run afoul of the wage and hour rules. Employers are frequently approached by students who are willing to work for nothing in order to make contacts that will help them find a paid job. As a general rule, such arrangements are not legal. Employers must pay anyone who provides services at least the minimum wage (which is $8 per hour in California). There is a limited exception for interns who qualify as trainees. This requires that the intern (1) be part of a program similar to training that would be provided at a vocational school, (2) be the target of the benefits of the program, (3) not displace regular employees but work under close observation, (4) not provide any immediate advantage to the employer through his or her work, (5) not be entitled to a job at the end of the internship, and (6) understand that no wages will be paid.
The U.S. Department of Labor recently issued a guidance letter about training and employment that explains the six factors the agency uses to determine whether a worker is a trainee or an employee. Further insight into the application of the factors is available in a May 2004 opinion letter from the Department’s Wage and Hour Division. The letter discusses the use of student interns to practice marketing on their college campus.
The California Labor Commissioner’s Division of Labor Standards Enforcement uses a similar test for determining whether an intern is a trainee or an employee. The test is explained in a 1996 opinion letter, which concluded that students used to perform routine work on movie studio lots were probably employees, even though they received college credit for what they did.