Many churches look to unpaid internships to provide much-desired experience in ministry-related activities for students looking to obtain not only ministry skills and experience, but also suitable skills for a secular workforce.
However, there have been recent concerns that some unpaid internships violate state and / or federal law.
Employment law experts around the country agree that this is the new hot topic for the Department of Labor. In fact, some states have increased their investigation of this issue, and other states are looking to follow; therefore, it is appropriate to first consider when an intern must be paid and when it is permissible to classify and treat an intern as an unpaid intern.
Unpaid intern vs. employee
So, how do we know who qualifies as an unpaid intern, rather than an employee?
A 1947 United States’ Supreme Court case, Walling v. Portland Terminal Co., 330 U.S. 148 (1947), and a
subsequent U. S. Department of Labor issuance of a six-part test help to determine whether an individual is a trainee, or unpaid intern:
• The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
• The training is for the benefit of the interns;
• The interns do not displace regular employees, but they do work under regular employees’ close supervision;
• The employer that provides the training derives no immediate advantage from the activities of the interns and, on occasion, the employer’s operations may actually be impeded;
• The interns are not necessarily entitled to a job at the conclusion of the training period; and
• The employer and the interns understand that the interns are not entitled to wages for the time spent training. (Tuition assistance and nominal stipends for students are not considered wages.)
This six-part test can be helpful guidance for determining if a worker is truly an unpaid intern. It is important to understand that in some cases, it might not be necessary for all six of the above factors to be satisfied for a worker to be classified as an unpaid intern. Any questions on this factor-based test should be directed to your legal counsel.
Two important factors: training and education
The Department of Labor focuses on two main factors: training and education. Meaning, that the internship must be primarily for the benefit of the intern and not the employer. The more directly related an intern’s tasks are to those that might otherwise be performed by staff, the more likely that the intern will be considered an “employee” under the Fair Labor Standards Act and entitled to compensation.
When is an intern not an intern?
So, how do we know when an intern is not really an intern, but an employee? The Department of Labor has named some examples of when an intern will not be considered an intern; these are otherwise known as the “Unpaid Intern Prohibited Factors.” The presence of any one of these factors means the intern should be classified as an employee:
• The employer uses the intern as a substitute for regular workers or as a supplement to its current workforce; or
•But-for the intern, the employer would have hired additional employees or asked its existing staff to work additional hours; or
• The intern is engaged in the employer’s routine operations and / or the employer is dependent upon the intern’s work.
Note: If you use an intern for seasonal work — such as summer camps, or holiday services — they may be called interns, but they should be paid at least minimum wage as they are being used to augment your current workforce.
Internships that are part of a formal academic experience (for example, the intern receives formal academic credit from an educational institution for the internship) are usually considered Internship by the Department of Labor. This can be very helpful for those churches and ministries that have college and seminary students serving as interns and the students’ degree program requires internship experience.
Because the tests outlined above are very fact-specific, your church should always seek legal counsel when developing its unpaid internship program.
David O. Middlebrook is a founding shareholder of Anthony & Middlebrook and the Church Law Group in Grapevine, TX. His clients include high-profile charitable and religious organizations, both domestic and international.
The materials in this article are provided for informational purposes only and do not constitute legal advice. This article is intended, but not promised or guaranteed to be current, complete or up-to-date and should in no way be taken as an indication of future results. Transmission of the information in this article is not intended to create — and the receipt does not constitute — an attorney-client relationship between sender and receiver.