This might have little to do with legal issues in craft business, but I thought I’d add a bit about unpaid internship. Besides, it’s been a while since I updated this blog.
My office has been contacted by a group in a foreign country who basically “exports” talents in that country to the US, temporarily. Foreign students can come to the US under either F-1 or J-1 visa. F-1 would be used by students who got accepted into a school in the US, for a full-time program. J-1 can be used for students who are already enrolled in a program in their home country but are interested in getting an internship program in the US.
In many countries, especially in Asia, young and eager students have a “I’ll do anything to get my foot in the door even if the position is unpaid” type of attitude.
Similarly, these students who signed up with this particular organization, wanted to get internship regardless of whether it is paid or unpaid. The group’s representative commented on how it would be easier for the program to work on unpaid internship basis. And asked, “wouldn’t it be a good deal for employers too, since they’re getting free help?”
I had a surprise for them. Unpaid internships are, in many situations, illegal.
In 2010, California Department of Industrial Relations, Division of Labor Standards Enforcement released an opinion letter describing the 6-factor test used to determine whether interns would be exempt from California’s minimum wage, overtime, and other labor laws.
This 6-factor test is nothing new. It’s been used by federal Department of Labor, as well as other states whose laws regarding internships follow the federal law very closely.
These factors are:
1) The training, even though it includes actual operation of the employer’s facilities, is similar to that which would be given in a vocational school;
2) The training is for the benefit of the trainees or students;
3) The trainees or students do not displace regular employees, but work under their close observation
4) The employer derives no immediate advantage from the activities of trainees or students, and on occasion the employer’s operations may be actually impeded;
5) The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6) The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.
Realistically speaking, many of small businesses in this area (California), that conduct business in the industry the students were interested in, might not be able to hire someone whom they’ll have to train, and hire as a regular employee. These students might not even speak English at business level, which makes it harder for employers to hire them.
Before it took in students who signed up for their program, and before it led the students to believe that they will soon be able to travel to the US soon and get an internship, the organization should have consulted with a lawyer who specializes in California labor laws in addition to an immigration lawyer. In this type of economic recession, many business owners are unwilling to hire employees who are only going to be here for few months.