It’s a complicated question, but more often than not the answer is NO.
Well-structured internship programs benefit both interns and employers. By participating in these valuable on-the-job learning opportunities, interns augment their work experience, hone important work skills, and develop their career goals. In turn, internships give employers access to a pool of motivated individuals who bring fresh thinking and innovation to their workplaces.
Interns are generally students or recent graduates who work on a full- or part-time basis and perform work for an employer that is relevant to their degree program. Internships in the “for-profit” private sector are most often viewed as an “employee” and subject to minimum wage requirements under the FLSA.
There are some circumstances under which individuals who participate in “for-profit” private sector internships may do so without compensation. Refer to Internships and the FLSA to determine if your intern program may meet the definition of a trainee program.
Unpaid internships in the public sector and for non-profit charitable organizations are generally permissible.
What about unpaid co-ops?
Cooperative education, commonly known as a "co-op", is a structured method of combining classroom-based education with practical work experience. A cooperative education experience provides academic credit for structured job experience.
Cooperative learning falls under the umbrella of work-integrated learning (alongside internships, service learning and clinical placements) but is distinct as it alternates a school term with a work term in a structured manner, involves a partnership between the academic institution and the employer, and generally is both paid and intended to advance the education of the student.
Unpaid co-op arrangements may be possible if the program meets the above FLSA definition of a “trainee program.” The work must be viewed as an extension of the individual’s educational experience versus performing productive work that benefits the employer.
Similar to internships, unpaid co-ops in the public sector and for non-profit charitable organizations are generally permissible.
Can someone ‘volunteer’ their time to work for my company?
It is unlikely that a for-profit business would meet the criteria for a volunteer. According to the DOL, an unpaid volunteer is: an “individual who performs hours of service….for civic, charitable, or humanitarian reasons, without promise, expectation or receipt of compensation for services rendered.”
To determine whether an individual is a true volunteer engaged in “ordinary volunteerism,” the DOL considers a number of factors. No single factor is determinative. The factors include:
- Is the entity that will benefit/receive services from the volunteer a nonprofit organization?
- Is the activity less than a full-time occupation?
- Are the services offered freely and without pressure or coercion?
- Are the services of the kind typically associated with volunteer work?
- Have regular employees been displaced to accommodate the volunteer?
- Does the worker receive (or expect) any benefit from the entity to which it is providing services?
A volunteer position is likely to be regarded as “ordinary volunteerism” and safely exempt from the minimum wage requirements of the Fair Labor Standards Act (FLSA) if you can answer “yes” to the first four questions and “no” to the final two questions.
It is unlikely that a for-profit business would meet the above criteria, and therefore should carefully consider the legal ramifications of using an unpaid “volunteer” that may in fact meet the definition of an employee. Misclassification of an employee can give rise to a variety of liabilities.
FINAL THOUGHTS: When in doubt, always pay minimum wage!
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