New Intern Test for Employers

Summer is just around the corner, and with it many students often seek a business internship. As of January 5^th of this year, however, the Department of Labor (DOL) has released a new classification test on the distinguishing factors between an employee from an intern – as well as when they’re allowed.

So, for employers who are in the process of accepting or currently have interns positioned within their business, here’s the new “Seven Factor” test to ensure that all parties involved operate under accordance to the law.

The Old “Six Factor” Test

Sometimes, it’s easier to better understand change when you have a comparison; which is why you may recognize the following as the old “Six Factor” test previously used to identify when student workers are interns, rather than employees:

1. The nature of the internship corresponds to an educational environment.
2. The internship is for the benefit of the intern only, not for the employer or paid staff.
3. The intern must work under close supervision of paid employees and should not displace existing staff.
4. The internship does not grant the employer any immediate business advantage or profit.
5. The intern understands that the internship does not guarantee a job upon completion of the program.
6. Both the intern and the employer understand that the internship will be unpaid.

The New “Seven Factor” Test

Though not vastly different from it’s predecessor, the DOL’s updated “Seven Factor” test was born mostly out of a necessity to highlight the primary beneficiary for interns of for-profit businesses.

The points are:

1. Both the intern and the employer understand that the internship will be unpaid.
2. The nature of the internship corresponds to an educational environment.
3. Upon completion of the internship, the intern is entitled to academic credit.
4. The internship must be in line with the academic calendar.
5. The duration of the internship only lasts as long as the intern continues to be educated.
6. The intern must work in a way that assists, rather than displaces, existing employees and that provides a clear educational benefit to the intern.
7. Both the intern and employer understand that a paid job position is not guaranteed upon completion of the internship.

As you can see, it’s clear that any intern working for your business should be doing so for – and only receiving – the educational benefits alone. So, if you currently have an intern that will continue working in your business, be sure to convert them to an employee at the end of the academic year.