Hopefully you have read our blog titled “Start-Up Businesses, Employees & Independent Contractors” for information regarding your company’s first hires. Another consideration for obtaining help with your business that you may want to explore is using interns. However, it is important to understand that you can no longer “pay” your interns with pizza, beer and “the experience” they get from working with you. In fact, unpaid internships are now strictly scrutinized by both federal and state labor departments.
To avoid being penalized for unpaid wages , your company should pay its interns at least minimum wage, with college credit for the internship, and/or follow a strict training program. However, if you decide to use unpaid interns, you should follow the six-prong test published by the Department of Labor to help ensure you comply with the law:
If your company’s relationship with an intern meets ALL of the above criteria, an employment relationship does not exist under federal law. In other words, the minimum wage and overtime provisions are not applicable to your interns. However, you should still confer with a local employment law attorney to understand what your state law requirements are and if you are in compliance with them.
The Swenson Law Firm is located in Sacramento County and we proudly serve businesses of all sizes from all over the State of California. Contact us today to learn more about how we can assist you with matters such as trademarks, defending lawsuits, business formation, contract negotiations, hiring employees, and protecting your intellectual property. With our years of complex business trial and litigation experience, we are an effective, efficient and affordable choice in representing you at the bargaining table and in the courtroom.
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