Tennessee Internship Programs under State and Federal Law
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70% of interns are hired at the same company they interned with following their internship. 39.2% of internships in the U.S. are unpaid positions, and 60.8% of internships are paid positions.
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.
Paid Internship Requirements:Paid interns shall have a set pay that is at least minimum wage, which shall be documented prior to the internship start date. Paid interns shall have set work hours, which shall be tracked by the intern's mentor.
Interns and students, however, may not be employees under the FLSAin which case the FLSA does not require compensation for their work. Courts have used the primary beneficiary test to determine whether an intern or student is, in fact, an employee under the FLSA.
Depending on the position, interns may or may not be paid. Unpaid internships are common, especially when the internship counts as academic credit toward graduation.
Unpaid Interns Interns are usually college students or recent graduates who work for a company on a temporary basis, often for academic credit. A company cannot be the primary beneficiary; an intern should not be replacing the work of an employee because the internship is for education and training purposes.
The Employment Act and Work Injury Compensation Act cover employees engaged under a contract of service. This includes internships if there is a contract of service signed between the intern and the employer.
In California, unpaid internships are legal as long as the employer follows specific rules and requirements. For starters, the intern must be the primary beneficiary and not the employer. The law recognizes the need for students to gain valuable work experience in their chosen field before they graduate.
Are unpaid internships illegal? Under existing laws, it's illegal for employers not to pay workers at least the national minimum wage. However, whether you're a 'worker' as an intern will depend on the nature of your work experience.