Are unpaid internships worth the risk for employers?
Recent litigation has left many companies wondering if they are going to continue offering students unpaid internships. Businesses are questioning whether it's worth the risk of violating the Fair Labor Standards Act's (FLSA) stringent terms for those who don't receive wages for their employee attendance.
Unpaid internships have gained popularity among employers and hopeful employees over the past few years. Those who have been unable to find work benefited from the resume-building job training, while employers were able to fill empty low-level positions with unpaid students, Economic Policy Institute's Ross Eisenbrey told USA Today. Half of the estimated 1.5 million internships every year are unpaid, the source reports.
Following two high-profile cases brought against Fox Searchlight and Hearst, many companies are rethinking the programs. To qualify for the exemption from regular employee rights, such as minimum wage and overtime pay, the Department of Labor's Wage and Hour Division explains that interns must be given tasks that are educational in nature as opposed to performing tasks that benefit the employer.
For example, interns tasked with filing paperwork, helping customers or answering phones may not be exempt from FLSA provisions and might have to be added to the payroll.
Unpaid internships have gained popularity among employers and hopeful employees over the past few years. Those who have been unable to find work benefited from the resume-building job training, while employers were able to fill empty low-level positions with unpaid students, Economic Policy Institute's Ross Eisenbrey told USA Today. Half of the estimated 1.5 million internships every year are unpaid, the source reports.
Following two high-profile cases brought against Fox Searchlight and Hearst, many companies are rethinking the programs. To qualify for the exemption from regular employee rights, such as minimum wage and overtime pay, the Department of Labor's Wage and Hour Division explains that interns must be given tasks that are educational in nature as opposed to performing tasks that benefit the employer.
For example, interns tasked with filing paperwork, helping customers or answering phones may not be exempt from FLSA provisions and might have to be added to the payroll.
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