As colleges and universities begin new terms, not all students are returning to the classroom. Some students are headed into the “real world,” to work alongside corporate titans, small-business owners, or moms and pops in their shops, while receiving academic credit—and not wages—for their efforts. These students are applying the lessons learned in their prior studies to real-world scenarios to gain valuable experience, build their skills, and make connections to help them succeed upon graduating. Or at least they should be. If they are instead used merely as a source of labor, they must be paid. But many employers mistakenly assume that because these students are getting school credit, they need not be paid. That is a trap into which employers reading this blog will not fall.
The Fair Labor Standards Act (“FLSA”) and state laws require employers to pay all employees for work performed. If students who participate in unpaid internships with private employers do not qualify as “employees,” they need not be paid. Whether those students qualify as “employees” depends on several factors, but the general rule is that these programs are lawful as long as the student, not the employer, is the primary beneficiary of the internship program.Continue Reading It’s a Trap! Students Receiving Credit Need Not Be Paid?