Are Your Clients Violating the Law By Hiring Unpaid Interns?

No matter what industry your clients work in, they could certainly expose themselves to Employment Practices Liabilities if they are not careful. Even your Non-Profit clients could find themselves exposed to risks for the misuse of interns and/or volunteers. Organizations can of course benefit from free labor, which may be the reason many companies decide to take them on, however plaintiff attorneys and government agencies in the employment practices arena are cracking down on these practices.

As stated in an article published by the Connecticut Law Tribune, simply labeling someone as an intern or a volunteer does not mean that’s what their job description actually is. There are strict criteria that should be met to determine whether an individual is a true intern or if they are misclassified and should actually be defined as an employee, entitled to payment.

Are your clients’ interns called such so that the employer can avoid workers’ compensation or unemployment claim? Are they paid? Are they receiving academic credit? These factors do not automatically dismiss the employer from defining the worker as an employee. While these definitions will vary depending on your state, under federal law unpaid internships must meet six basic criteria to be considered legal:

• The internship is comparable to the same type of training a person would receive in an educational environment.
• The internship experience is for the benefit of the intern.
• The intern doesn’t 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 entitled to a job at the conclusion of the internship.
• Both the employer and intern understand that the intern is not subject to wages at the end of the internship period.

Given these 6 definitions, one can see how easy it would be for an employer to face a legal claim for their internship practices, even if unintentional. At PL Risk Advisors, we understand the unique Employment Practice Liability Insurance risks you face, as well as those of your clients. Whether your client is the head of a large corporation or a small business owner, EPLI should be part of their comprehensive insurance program. To learn more about our EPLI policies as well as the other products we offer, please contact us today at (855) 403-5982.