In California, the state’s wage and hour laws apply only to paid interns who are paid an hourly wage. The state’s wage and hour laws do not apply to paid interns who received a fixed stipend. The state’s employment laws regarding civil rights and non-discrimination apply to paid and unpaid interns as they would to employees.
In order to call an unpaid position an “internship,” an employer must offer the position as part of an established course offered by an accredited school. The internship may also be offered through an institution approved by a public agency to offer the worker a license or qualify for a skilled vocation or profession. One example is a medical student working for a set number of hours at an emergency clinic.
For-profit employers must meet stricter criteria than non-profit employers. The federal Department of Labor has a six-factor test for for-profit employers. The rules require employers to offer training that does not benefit the employer but benefits the intern. The training must be similar to that which would be provided in the intern’s educational institution. It should not displace regular employees. This means an intern should not be used to fill the position of a regular employee.
Internships are illegal if they only benefit the employer. A good test to determine whether the internship is a job is to ask if the employer would financially benefit from the intern’s actions. For example, if an intern was asked to engage in telephone sales from which the employer would reap a profit, the intern may be entitled to pay. Also, if an intern was asked to do menial work that did not relate to their degree, such as empty trash cans, they may be entitled to pay.
In certain cases, employers may offer training to employees in which the employees are paid 85% of the state’s minimum wage for their first 160 hours. These employees are not interns, but “learners.” They may be offered training at a low rate only if they have no relevant experience.
Since paid and unpaid interns appear, by law, to generally be classified as employees, they should be covered under worker’s compensation. Interns may not be covered by worker’s compensation if they are a volunteer for a public agency or a private, non-profit organization, and do not receive monies for anything other than meals, transportation, lodging, or reimbursement for incidental expenses