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The Intern That Isn't: Part 2

Under  federal law, interns are very different than regular employees. The six criteria for a valid internship make it difficult, but possible, for a farm to utilize interns. Farms must pay careful attention to program structure, not use interns as a labor source, and communicate clearly with interns.

What’s the situation?

Internships are a very common way for farms, and many other industries, to trade wages for an educational experience. The problem is that many farmers aren’t aware that the federal government has defined exactly what an internship is and isn’t. Failure to comply with internship standards opens the farm up to a potential lawsuit.

Where does the law come in?

The law clearly states that an intern cannot be an employee. Regardless of the title given to a worker, if they look like an employee, act like an employee and are managed like an employee, that worker is an employee. Employees are regulated by the Fair Labor Standards Act (FLSA), which requires farms to pay employees the minimum wage (with the exception of federally defined “small” farms).

Details, please:

My previous post introduced readers to the background on federal internship law. Let’s recap: Interns, apprentices, and employees are three distinct worker categories. Interns and apprentices both receive education, but they are completely different in terms of regulations. Apprentices are employees that may be paid less than minimum wage. Interns may also be paid less than minimum wage but the catch is that interns are not employees. Interns may not benefit the farm – interns work exclusively for their own benefit. That’s why they aren’t classified as “employees” and why they can be paid less than minimum wage.

Internships aren’t regulated by statute; instead the 6 criteria for an internship were established through a 1940’s court case. Since then those 6 criteria have stuck, and were recently reaffirmed by the Department of Labor (DOL) in Fact Sheet #71. I need to emphasize that Fact Sheet #71 applies to for-profit businesses. If your farm is a nonprofit organization (in that  your farm is a 501(c)(3), not simply a labor of love!) then these criteria do not apply to your intern program.

My previous post discussed two of the six criteria:

  1. The internship must be for the benefit of the intern.
  2. The intern must not provide the business with an immediate advantage, for example, by performing the regular, productive work of the business.

This week, we’ll talk about the remaining four criteria:

  1. The internship must be similar to an educational course.
  2. The intern does not displace regular employees.
  3. The intern is not entitled to a job at the conclusion of the internship.
  4. The intern and employer understand that the worker is not entitled to compensation.

If each of the six criteria aren’t met, the worker is an employee and falls under the regulations of the FLSA.

Number four states that an internship has to look like an educational course. At first, this seems do-able because we know the farmer provides instruction to new hires about the mechanics of farming. Let’s take tomatoes- you show the new guy how to trench seedlings, how to trellis growing plants, how to determine ripeness, and then how to clip, store, and display tomatoes for sale. That’s a thorough education. But I’m not sure that would satisfy the DOL. Fact Sheet #71 specifically states that the position must be “structured around a classroom or academic experience,” which is quite different than inserting educational content into a work experience.  If a farm has established curricula to teach tomato production, they stand a better chance of meeting this criterion.

Criterion four is a tricky one: the intern cannot displace regular employees. If a farmer hires interns instead of employees, she’s clearly not meeting this criterion. But what if the farmer decides to hire an intern or hire no one at all? You can hear him say, “My intern doesn’t displace an employee because I wouldn’t hire employees anyways. I would just work longer, harder hours if the intern wasn’t around.” It’s a good argument. But I don’t know of the court would buy it. These issues haven’t been litigated. A good lawyer could certainly argue that the farmer is not his own employee and therefore his intern doesn’t displace himself. But in that case you probably have a “small farm” and are exempt from the FLSA, including the requirement to pay minimum wage as a whole.

Criteria five and six are relatively straightforward. Farmers cannot use internships to trial-run potential new employees. Fact Sheet #71 seems to say that the trial-run exists according to the intern’s perspective. If the intern thinks she’ll be awarded a permanent position if she does well enough, the farmer might violate this criteria. Lastly, both farmer and intern must understand that the intern is not entitled to wages. Again, the emphasis should probably be on the intern’s perspective. Promising performance bonuses or a stipend if the intern works at least a certain amount of time would probably violate criterion six.

These criteria are challenging but still do-able. The bottom line is that interns are not employees. Internships are educational programs, not affordable labor mechanisms. If a farm does not structure their internship program in accordance with federal law and either the intern or the government files suit, the farmer could potentially be liable for employee back wages plus back taxes. I highly doubt the DOL will be showing up at the farm gate anytime soon. But regardless, every business owner should be aware of these regulations and use them to guide their decisions.

Next up: Can you just call your interns “volunteers” instead and avoid the six criteria? We’ll also talk about meeting minimum wage requirements with food and housing instead. Sooner or later we’ll discuss new state internship laws.

What do you think?

  • If we all know that most industries don’t follow internship criteria should farmers hold themselves to the criteria?
  • What makes farmers more or less likely than other industries to be sued on this issue?
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