The Fair Labor Standards ActThe federal wage and hour statute, the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., requires that covered, non-exempt employees be paid at least the federal minimum wage for each hour worked and receive overtime pay at one and one-half times the employee’s regular rate of pay for all hours worked over 40 in a workweek. The FLSA broadly defines the term “employ” as to “suffer or permit to work.” 29 U.S.C. § 203 (g). It provides that “employee” means, “any individual employed by an employer. . . .” and goes on to exclude certain types of workers. 29 U.S.C. § 203(e)(1). Interns may qualify as employees unless an exemption is met.
US Department of Labor ("USDOL") Six-Factor TestThe USDOL has recognized that there are some circumstances where an employer may not be required to compensate a “trainee” or an intern because no employment relationship exists under the FLSA. To determine whether an internship program meets the USDOL exclusion, the programs must meet all six of the following criteria:
- 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; and on occasion its operations may actually be impeded;
- 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.
Interpretation by the Courts
The appellate courts interpreting the FLSA have not consistently followed the USDOL six-factor test for determining a worker’s status. Some courts have explicitly criticized the test. Others apply an “economic realities” test or look at the primary beneficiary of the work performed.
Similarly, not all federal appellate circuits apply the USDOL six-factor test to unpaid interns, trainees, or student workers and the six-factor test has come under some criticism outside of the Eighth Circuit.
For example, the Sixth Circuit has criticized the USDOL six-factor test as being overly rigid and inconsistent with the totality-of-the-circumstances approach. See Solis v. Laurelbrook Sanitarium and School, Inc., 642 F.3d 518, at 525 (6th Cir. 2011) (“We find the [Wage and Hour Department’s] test to be a poor method for determining employee status in a training or educational setting.”). Instead, the Sixth Circuit adopted a “primary benefit” test, focusing on which party received the primary benefit of the work performed. Id. at 525-26. Other circuits have also adopted the “primary benefit” test. See, e.g., McLaughlin v. Ensley, 877 F.2d 1207, 1209-10 & n.2 (4th Cir. 1989) (“We do not rely on the formal six-part test issued by the Wage and Hour Division.”); Donovan v. Am. Airlines, Inc., 686 F.2d 267, 272-73 (5th Cir. 1982). These courts often do, however, still consider other factors similar to the USDOL six-factor test, such as employee displacement and derived educational value. See Solis, at 526; Donovan, at 273.
This lack of uniformity regarding the application of the USDOL six-factor test among the appellate courts presents another obstacle for private employers that wish to utilize unpaid interns, beyond interpreting the six-factors alone.
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The Minneapolis internship and employment attorneys of Trepanier MacGillis Battina P.A. in Minneapolis, Minnesota represent employers regarding unpaid internship law, wage and hour law, overtime, unpaid wages, and unpaid commissions. Our Minneapolis internship and employment attorneys represent clients in Minneapolis, St. Paul, St. Cloud, Rochester, Duluth, Albert Lea, Apple Valley, Brainerd, Eagan, Eden Prairie, Edina, Elk River, Mankato, Maple Grove, Minnetonka, Moorhead, Richfield, Stillwater, Twin Cities, and other cities within the State of Minnesota (MN) (Minn.).