Many companies have a long-standing practice of engaging college students or other industry initiates as unpaid interns. These internship programs can provide benefits both to the interns and to the companies that engage them. What could be wrong with that? According to the U.S. Department of Labor, these arrangements could violate the Fair Labor Standards Act (FLSA).
Under the FLSA, “employees” must be paid at least minimum wage for all regular hours worked, and nonexempt employees must be paid overtime for all hours worked in excess of 40 per week. Companies argue that unpaid interns are not employees and are not covered by the FLSA. But this argument is muddied by the FLSA’s broad and vague definitions of employee (“any individual employed by an employer”) and employ (“to suffer or permit to work”). If an intern meets these definitions, then he or she could be covered by the FLSA and therefore entitled to wages.
