New York Unpaid Interns May be Eligible for Worker's Compensation
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FAQ
Unpaid internships are legal if the intern is the primary beneficiary of the arrangement. This is determined by the seven-point Primary Beneficiary Test. If an employer is the primary beneficiary, the intern is considered an employee under the Fair Labor Standards Act and entitled to minimum wage.
The only situations in which an employer would not be required to provide coverage are: If the business is owned by one individual and there are no employees, leased employees, borrowed employees, part-time employees, unpaid volunteers, or subcontractors.
It does not apply to Unemployment Insurance, Workers' Compensation, and/or any other law. Not-for-profit organizations and institutions of any type also may have unpaid interns, if they meet all the criteria for an intern who is not in an employment relationship.
Workers' compensation coverage IS NOT required for partnerships, LLCs, and LLPs that do not have employees.
Is Workers' Compensation Coverage Required? Workers' compensation coverage is not required for a sole proprietor who does not have employees.
Any employee or employees or class of employees not enumerated in section three, subdivision one, group one to seventeen inclusive, of this chapter, employed by a municipal corporation or political subdivision of the state, may by the terms of the contract or agreement be expressly excluded therefrom.
In general, an intern is exempt from the New York State Minimum Wage Act and Orders (meaning, the intern does not need to be paid minimum wage, if anything) only if the intern and the business are not in an employment relationship.
Businesses in New York State must have workers' compensation coverage for all employees. The rule includes part-time employees and family members employed by the company. Employers must have a workers' compensation insurance policy.
Interns are considered employees if they substitute for regular workers or add to an existing workforce during specific time periods. Interns are viewed as employees if the company would need to hire additional employees or require existing staff to work more hours to do the interns' work.
Student interns are individuals who provide services to gain work experience. Workers' Compensation coverage is required for student interns (paid or unpaid) who provide services to a for-profit business, a nonprofit organization, or a government agency.
