It’s Best to Pay Your NYS Interns in Business and at Work
New York state is one of the more challenging and complex states for employers to navigate in the nation from a regulatory standpoint.
Equally complex are the requirements that for-profit organizations need to meet in order to employ unpaid interns, from the NYS Department of Labor website:
In general, an intern is only exempt from the requirements of the Minimum Wage Act and Orders if the intern is not in an employment relationship. To determine whether an employment relationship exists, the department uses six criteria from the U.S. Department of Labor and five criteria of its own to evaluate the situation. An employment relationship does not exist only if the situation meets ALL of these criteria:
1. The training, even though it includes actual operation of the employer’s facilities, is similar to training provided in an educational program.
2. The training is for the benefit of the intern.
3. The intern does not displace regular employees, and works under close supervision.
4. The activities of trainees or students do not provide an immediate advantage to the employer. On occasion, operations may actually be impeded.
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period and are free to take jobs elsewhere in the same field.
6. The trainees or students are notified, in writing, that they will not receive any wages and are not considered employees for minimum wage purposes.
7. Any clinical training is performed under the supervision and direction of people who are knowledgeable and experienced in the activity
8. The trainees or students do not receive employee benefits.
9. The training is general, and qualifies trainees or students to work in any similar business. It is not designed specifically for a job with the employer that offers the program.
10. The screening process for the internship program is not the same as for employment, and does not appear to be for that purpose. The screening only uses criteria relevant for admission to an independent educational program.
11. Advertisements, postings, or solicitations for the program clearly discuss education or training, rather than employment, although employers may indicate that qualified graduates may be considered for employment.
In most NYS businesses (especially start-up businesses and smaller businesses), employees and interns alike are expected to be multi-functional Swiss army knives. For that reason, meeting all of the above criteria for most organizations is challenging at best. Therefore, the consistent recommendation to clients and colleagues alike is to pay their interns as temporary or regular hourly nonexempt employees, based on the mutual needs of the organization and the interns in business and at work.
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