Some employers make the misguided decision not to pay employees and to treat them as unpaid interns. This can be a costly mistake.

New York and Federal laws require that non-exempt employees be paid the minimum wage.  In upstate New York the minimum wage is currently $12.50 per hour for most workers, and $14.50 per hour for fast food workers.

Failure to pay the minimum wage to employees can result in significant liability for back pay, penalties, and interest.

Internships are supposed to be a part of a student’s educational experience, and not a source of free labor.   The best way to have an unpaid intern working for a business is to coordinate the internship through a college or university internship program.

The U.S. Department of Labor has identified the following factors to be considered in determining the legitimacy of an unpaid internship.

            1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee.

            2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.

             3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.

             4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.

            5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.

             6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.

              7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.