Q.After three years of low consumer demand, my company is finally showing signs of economic recovery. However, I am hesitant to hire new employees in case it proves to be more a temporary blip than a permanent trend. Can I hire summer interns to help me temporarily increase production?
Historically, summer internships have been a rewarding way for students to gain real life experience in a field of their interest. Internships also provided employers the valuable opportunity to evaluate interns for potential future employment positions. In the challenging economy of the past few years, however, individuals with no immediate job prospects are turning to internships as a way to simply keep their skills sharp or to get their "foot in the door." While this sounds like a win-win situation, internship programs can mean risky business for companies. Alarmingly, a number of interns have recently brought class action lawsuits against their former employers claiming that they should have been classified as employees rather than interns and seeking unpaid wages and overtime for their services. Employers considering internships should know the potential risks.
The Fair Labor Standards Act ("FLSA") defines a company's responsibilities regarding compensation to its employees. While interns are not employees and not subject to FLSA requirements, the U.S. Department of Labor has warned employers that the internship exclusion is narrow, and has stepped up monitoring of internship programs.
The test for determining whether...