Pay Now or Pay Later: Can You Hire an Unpaid Intern?

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With summer here many companies plan to bring on summer interns who are home from college. It’s not uncommon for interns to even approach you about working unpaid because they want the experience. Regardless of the intent, the Department of Labor (DOL) regulates the paying of interns in the way it regulates the pay of all employees.

In January 2018 the DOL adopted a primary-beneficiary test which replaced the previous six factor test for for-profit employers. This new test is more forgiving to employers as it looks at the totality of the circumstances, as opposed to requiring that each factor be met (as was the previous case).

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Independent Contractor Liability Exposure

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Despite rapid growth, the gig economy continues to confound businesses and courts alike. An April 2015 study by the U.S. Government Accountability found that 40.4% of the country’s jobs are contingent—up 10% since 2005. Now, just a year after Lyft paid a $27 million dollar settlement to address potential employee misclassification, a court in Philadelphia ruled that, under Federal and Pennsylvania state law, Uber limousine drivers were properly classified as independent contractors (and not as employees). Two similar businesses with two very different outcomes. How can you deal with the risks created by this uncertainty?

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