On January 5, 2018, the Department of Labor updated their guidance on unpaid internships. While the new legislation seems to be more relaxed (yay!) they have increased the number of factors that should be considered.
Previously employers had to meet all the requirements of 6 factors to determine if their internship could be unpaid. Now, due to many courts utilization of the "primary beneficiary test," the department of labor has adopted the same test.
Seven factors are outlined in the test to help determine whether an internship can be unpaid. The "primary beneficiary test" helps determine who benefits from the relationship, the employer or the intern. The Department of Labor would like for the intern to benefit from the experience more than the employer.
What makes the "primary beneficiary test" different from the previous requirements, is now you don't have to meet ALL of the factors. You may want to hold off on doing your happy dance... while not ALL of the 7 factors need to be met, you should still be meeting as many of the factors as possible.
Four of the seven components included in the new test focus on aspects of training and education. Partnering with a university, college, trade school, etc., is going to help you with 4 out of 7 factors!
If you are having a hard time meeting the requirements of an unpaid internship an easy solution is to pay your intern at least minimum wage (in Colorado this is now $10.20) and overtime.
While it may appear that the Department of Labor is softening their requirements, you should still be cautious when implementing an unpaid internship program. Having the right practices and documents in place will help minimize your risk level.
To find out more about the 7 factors, the "primary beneficiary test" and unpaid internships click HERE.
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simplyHR LLC is an HR consulting firm located in Fort Collins, CO providing partnerships to companies in Northern Colorado and beyond.
The content of this website provides practical and HR best practice information and is not legal advice. simplyHR LLC does not provide legal advice or other professional services. While every effort is made to provide accurate and current information, laws change regularly and may vary depending on the state and/or the municipality your business operates in. The information provided from simplyHR LLC is provided for informational purposes and is not a substitute for legal advice or your professional judgement. You should review applicable federal, state and municipality laws in your jurisdiction and consult with legal counsel as you deem necessary.