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Anyone who has dipped their foot into the job market in the last few years will attest to the fact that it is an employer’s market. New graduates, current students who want to get a leg up, and even not so new graduates are increasingly willing to work for free in hopes of getting their foot in the door and landing a full-time job or just to have something to fill a growing gap in their resume.  Many employers are more than happy to take advantage of the free labor.

But should you?

California and federal law requires payment of minimum wages and other protections to employees.  These protections are not extended to independent contractors or trainees and interns.  However, misclassification of independent contractors and interns could be extremely costly to employers.

Do interns have to be paid?  

It depends on whether the person working for you constitutes an intern exempt from minimum wage laws.

An opinion letter issues by the California Division of Labor Standards Enforcement (DLSE) outlines 6 criteria used to analyze whether a worker is an intern rather than an employee.  The six criteria are as follows:

1.  The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;

2.  The training is for the benefit of the trainees or students;

3.  The trainees or students do not displace regular employees, but work under their close observation;

4.  The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may be actually impeded;

5.  The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and

6.  The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

As previously discussed, the cost of misclassification of workers could be crippling for California employers.

TIP:  California employers should closely consider the above 6 six criteria before taking on an unpaid intern.  If you are unsure whether your new worker should be classified as an employee, independent contractor, or intern, consult a California employment attorney.  Feel free to contact our office if you need assistance or call 949.529.0007.