Schools statewide are letting out for the summer, which means thousands of high school and college students will be looking for summer jobs and internships — which can benefit both student and employer.
But employers must proceed with caution. While the term “intern” is often used loosely, a true unpaid internship must meet specific criteria. And for minors, laws restrict the occupations and hours they may work, and hiring them requires work permits and special recordkeeping.
Whether an individual could be treated as an unpaid intern is based on the “primary beneficiary” test, which determines who most benefits from the intern-employer relationship. If the intern primarily benefits, then that individual would be properly classified as unpaid. To determine this, employers must examine the extent to which:
- The intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee.
- The internship provides training like that given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
- The internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
The primary beneficiary test is flexible, according to the U.S. Department of Labor, and whether an intern or student is an employee under the Fair Labor Standards Act “depends on the unique circumstances of each case.”
As for hiring minors — those under the age of 18 — employers must make certain that:
- They have a valid Form B1-1 (Statement of Intent to Employ Minor and Request for Work Permit) for the current school year and it is on file with the school district.
- The school district has issued a work permit, Form B1-4 (Permit to Employ and Work) for the current school year and you have it on file in the workplace.
- The minor’s work schedule complies with the legal number of hours allowed.
Also remember that thanks to AB 1963’s passage in 2021, employers with five or more employees that also hire minors have mandated reporter training requirements. Under the law, two categories of employees within such organizations are labeled “mandated reporters” — individuals who must make formal reports of suspected child abuse and neglect to law enforcement authorities:
- “Human resource employees,” defined as any employee designated by the employer to accept any complaints of misconduct (i.e., discrimination, harassment, retaliation, etc.) made under the FEHA; and
- A person whose duties require direct contact with and supervision of minors’ duties in the workplace.
Covered supervisors’ reporting obligations are limited to instances of sexual abuse; however, HR employees are not subject to this limitation and must report all types of child abuse and neglect.
Covered employers must provide these employees with training in both identifying and reporting child abuse and neglect, and the training requirement may be met by completing the Child Abuse Mandated Reporter Training offered by California Department of Social Services’ Office of Child Abuse Prevention.