In April 2010, in the midst of recovery from the great recession of 2008, the U.S. Department of Labor issued new guidance on the use of unpaid interns in the private sector. The guidance provided a six part test to determine whether or not the internship qualified as an educational exception to wage payment laws. Failing the six part test causes an internship to be subject to pay for time spent in the program. This six part test is also used for the definition of an intern found in the Illinois Human Rights Act. The Act was amended effective January 1, 2015 to include interns as employees for purposes of sexual harassment coverage. The six part test is:
1. The internship is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision.
4. The employer derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The U.S. Department of Labor has distinguished interns in the public sector stating that unpaid internships, “where the intern volunteers without expectation of compensation are generally permissible.” Public sector employers should exercise care to document the voluntary nature of the relationship.
In a recent case (Brown v. New York City Department of Education, June 2014) the Plaintiff was employed as an unpaid intern while awaiting a possible teaching position. The Plaintiff sued seeking payment for the time he worked. The court said a volunteer internship is possible in the public sector provided the intern is not promised compensation and the intern performs work freely and without pressure or coercion from the employer. Although the intern in Brown worked the regular school day and occasionally received cash payments from the employer, the court found that the intern chose his own work hours and the payments were expense reimbursements, not intended as salary.
Public and private sector employers need to exercise caution when establishing the internship relationship and also during the time the intern is in the workplace. The terms and conditions of the relationship should be documented. Interns and other volunteers should not be forced or coerced to work by the employer. While interns and volunteers are treated differently in many respects from paid employees, the intern should be treated like any other employees for purposes of sexual harassment under the Illinois Human Rights Act. This recent amendment to the Human Rights Act may lead a court to consider interns as employees for all purposes under the Act. Additionally employers may want to follow the six part test used in the private sector when establishing an internship since that test now appears in the Human Rights Act. This is an area fraught with difficulty and guidance from legal counsel may be necessary to avoid possible claims under the Human Rights Act and wage payment laws.