Does a Texas Employer Have to Pay an Intern?


Hello. Dustin Paschal with Simon Paschal, and Simon Paschal Says, our legal tip. The idea is that we want to welcome you into our office and give you the chance to get a little bit of legal information from us on different topics affecting employment law and business law. So this week, we’re going to talk about internships. We’re kind of at that period of the year when companies are seeking out interns and looking to hire interns. And the question that always comes up to us is whether or not the interns need to be paid. And so the Department of Labor actually has a test on whether interns should be paid or should not be paid. And it is a six factor test, and it’s kind of fact specific, and specific to your situation and both the intern and the job they’re doing and the work you do and your company. So we caution you to go through it and not take it as a matter of fact, but go through each element with the internship you have to determine whether it should be paid or not.

So the six factors are first, the internship should be similar to that, that would be in an educational setting. It should be an academic experience for the intern, not just clerical work like filing, or answering phones or things like that. The second factor is that the internship should be for the benefit of the intern, not for the benefit of the employer. The third factor is that the intern should not displace other employees. In fact, they should be working under close supervision of employees, so if you have a just a ton of work that you’ve got in the office and you just need some extra help, and you hire some “interns”, those people need to be paid. Those aren’t interns. The fourth factor is that the employer should not derive an advantage, or a benefit from having the intern in place. In fact, sometimes the employers operations should be hindered by the fact that they have an intern because that intern is learning. The fifth factor is that there should be no expectation of continued employment beyond the period of the internship. So you want to have a defined period for the internship and there should be no expectation of continued employment beyond that. And then the final factor is that both parties, both the employer and the intern, should agree that the internship is not to be compensated.

So if you can go through each six of those factors and satisfy those six factors, then you have an exclusion to the Department of Labor’s requirement to pay employees and internship would be unpaid. So thank you for joining us for Simon Paschal Says this week.

 

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