The Labor Department announced Friday that it would adopt stricter rules for what separates employees from interns.
The department said it was dropping a six-point test it had used in favor of a broader seven-point one that several federal courts have endorsed. The new standard will create a higher bar for employers to prove that their interns are just that.
“The Department of Labor today clarified that going forward, the department will conform to these appellate court rulings by using the same ‘primary beneficiary’ test that these courts use to determine whether interns are employees under the [Fair Labor Standards Act]. The Wage and Hour Division will update its enforcement policies to align with recent case law, eliminate unnecessary confusion among the regulated community, and provide the division’s investigators with increased flexibility to holistically analyze internships on a case-by-case basis,” the department said.
The question of when a person stops being an intern and starts being an actual employee has long been a gray area. Various groups of interns have sued employers arguing that they were doing doing the work of employees and therefore deserved pay and other benefits.
Previously, the Labor Department used a six-point test that focused on whether it was understood from the start that the internship would not be paid, that it did not necessarily lead to a job, and did not “displace regular employees,” among other factors.
Class-action cases before the 2nd Circuit Court of Appeals in 2016, Glatt v. Fox Searchlight Pictures, and the 9th Circuit last year, Benjamin v. B&H Education, argued the test was too restrictive. The courts agreed, both adopting standards that focused on whether the internship was primarily educational. That included whether the training the intern receives reflected what they would get in a classroom, whether it complements the school year, and whether the activities they perform can be considered as proving “significant educational benefits.” The 9th Circuit argued that this “test allows courts flexibility in examining the economic reality between the intern and the employer.”
In Friday’s announcement, the department said it was formally adopting the courts’ rulings and updated the Wage and Hour Division’s fact sheet on internships to reflect the move.
