- the internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
- the internship experience is for the benefit of the intern;
- the intern does not displace regular employees, but works under close supervision of existing staff;
- the employer that provides the training derives no immediate advantage from the activities of the intern;
- the intern is not necessarily entitled to a job at the conclusion of the internship; and
- the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The Glatt court went on to apply the foregoing reasoning and suggested that the following, non-exhaustive seven factors should be considered when making the intern/employee determination:
- 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;
- 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;
- the extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit;
- the extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar;
- the extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning;
- 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; and
- 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.
If you are in an industry that utilizes unpaid interns, hopefully you will never be confronted with a claim that they should be deemed employees and thus entitled to compensation. However, should such an issue arise, in assessing any such claim, going forward, the DOL is going to focus on the economic reality of the relationship, determine which party is the primary beneficiary of the relationship, and consider the seven-part Glatt test in making its determination. As an employer, you would be well-served to keep these factors in mind when establishing the ground rules of your company’s relationship with its unpaid interns.
About the Author: Paul Mengel is counsel and heads the Litigation Group. He may be reached at email@example.com, or at (202) 857-1000.