Legally Valid Unpaid Internships are Rare

Legally Valid Unpaid Internships are Rare

By Catharine Morisset, Attorney at Law

The master-apprentice learning relationship is a time-honored tradition in the hospitality industry, but there are very clear legal requirements on compensation for apprentices. Unpaid chefs in training—traditionally called “stagiares” or “stages” after the French word for “trainee”—and unpaid hotel interns such as concierges in training are not legal under federal law. They also violate Washington’s wage and hour laws.

The U.S. Department of Labor has particularly called out stage programs in the restaurant industry as a common practice that violates minimum wage requirements. Washington state regulators are similarly concerned about businesses that claim its interns are “volunteers” who have no expectation of pay.

Under the Fair Labor Standards Act and Washington’s similar Minimum Wage Act, there is no such thing as an unpaid volunteer for a for-profit corporation. Individuals who perform work must be paid at least minimum wage and overtime—even if those individuals state that they do not expect to receive wages—and they must be counted as workers for the purposes of Washington’s workers’ compensation laws.

There is a very narrow exception for educational interns. However, most restaurant stage programs or hotel internship programs will not meet these strict guidelines. To qualify as an unpaid educational internship, all of these criteria must be met:

The internship consists of work-related, hands-on training for a specific occupational field that is an extension of an educational experience.

The training, even though it may include actual operations at the employer’s, is similar to what would be given in an educational environment or vocational school. The more the internship program is structured around classroom or academic experience, the more likely it will be viewed as an extension of education.

The training primarily benefits the intern, not the business.

The intern does not displace or perform productive work of regular employees (e.g., a stage who performs dishwashing work or an intern who answers guest calls at the front desk would fail to meet this part of the test). The agency and courts will examine if the business would have needed to hire other workers to perform those tasks in the absence of the intern.

The intern is closely supervised, i.e. works in tandem with a mentor. Job shadowing, rather than performing actual work, is more likely to be viewed as a bona fide educational experience.

Assuming that your unpaid intern or stage program is legally valid can be costly. If it is found to be unvalid, under Washington law, you could be assessed all back wages, plus prejudgment interest, attorney fees and likely a double wage penalty. In short, check with your employment law counsel before putting any unpaid internship program in place.

This article is not intended as legal advice. Please consult your employment attorney for guidance on your specific situation. Catharine Morisset is a partner in Fisher Phillips’ Seattle office. Her practice focuses on representing local and national employers in litigation in state and federal courts, on appeal, and also before the EEOC and similar state agencies in all aspects of workplace law. You can reach her at cmorisset@fisherphillips.com or visit www.fisherphillips.com for more information.

The Cost of an Unpaid Intern

You may think that having an unpaid apprentice or intern is great for everyone, but an unpaid internship or apprenticeship can be very costly. If the internship you offer is deemed illegal, you could be required to pay:

  • Back wages
  • Prejudgment interest on back wages
  • Attorney fees
  • Possible double wage penalty

(Source: Washington Hospitality Magazine, August 2017)

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