Are you an intern in California? Getting Paid?

Unpaid Internships in California, Legal or not?

With our current economic state, companies, employees and new graduates are equally concerned with employment. College students or new graduates are facing the age old issue of having a degree without experience, while companies are looking to save money on payroll and keep a knowledgeable staff. Oftentimes companies will offer unpaid internships, a seemingly mutually beneficial relationship. College students are able to add experience to their resumes while companies get free labor.

But at a closer look, this might not be a fair shake. What if the student is studying to be in marketing and the company places him/her in the accounting department to do data entry all summer?

Federal Department of Labor (DOL) has set forth a few ground rules on who should be considered and intern versus who will be an employee.

1. The training is similar to that which would be given in a vocational school.
2. The training is for the benefit of the trainee.
3. The trainee does not displace a regular employee and works under close observation.
4. The training provider derives no immediate benefit from the trainee; in fact, its operations may be impeded.
5. The trainee is not entitled to a job at the completion of the training.
6. The employer and the trainee understand that the trainee is not entitled to wages; however, a stipend may be permitted. (Employment Relationship/ Trainees, U.S. Dep’t of Labor Op. Ltr. Wage and Hour Adm. WH-229.)

California Department of Industrial Relations took it a step further and added a few criteria of its own:

7. The training should be part of an educational curriculum.
8. The students should not be treated as employees for such purposes as receiving benefits.                                                              9. The training should be general in nature, so as to qualify the students for work for any employer, rather than designed specifically as preparation for work at the employer offering the program.
10. The screening process for the program should not be the same as for employment.
11. Advertisements for the program should be couched in terms of education rather than employment. (See generally Cal. Div. of Labor Standards Enforcement, Opn. Ltrs. 1998.11.12 and 1996.121.30, available at www.dir.ca.gov/dlse/ DLSE_OpinionLetters.htm.)

It’s important to be able to distinguish who will be considered an intern and who should be considered an employee, not only for payment purposes but also for workers compensation insurance and for benefits entitled to employees such as medical insurance and paid time off.

Labor law is complex; if you have any questions regarding your employment it is recommended that you contact a San Francisco labor law attorney who can help you understand your rights, and in many cases will review your situation without charge.