Do California Companies Need to Pay Their Interns?

by | Nov 12, 2019 | Business Law, General Counsel

Do California companies need to pay interns

Do California Companies Need to Pay Their Interns?

Every year, thousands of small businesses in San Diego and throughout California welcome new groups of interns into the fold. If your company has been considering taking on some interns of your own, you may be wondering whether or not you need to pay them. To find out, let’s take a look at the guidelines that have been established by the state and federal governments:

Federal Internship Laws

The U.S. Department of Labor considers the following factors when deciding whether or not an unpaid internship is legal:

  • The extent to which an intern and their employer understands there is no expectation of compensation for the role.
  • The extent to which an internship provides the intern with training that is similar to that which they would receive in an educational environment.
  • The extent to which an internship is tied to an intern’s formal education program through coursework or academic credit.
  • The extent to which an internship accommodates an intern’s academic commitments by working around their class schedule.
  • The extent to which an internship’s duration is limited to the time within which it provides an intern with beneficial learning.
  • The extent to which an intern’s work complements the work of paid employees instead of displacing it.
  • The extent to which an intern and their employer understands that there is no guarantee of a paid position at the conclusion of an internship.

If you need an experienced business attorney in San Diego to help your leadership team better understand these points, please do not hesitate to reach out to the Semanchik Law Group. Over the years, we have helped countless local companies make sure that their employment practices were fully compliant with the law, and we would love to do the same for you.

California Internship Laws

California’s Division of Labor Standards Enforcement (DLSE) has its own set of rules surrounding the legality of unpaid internships. If your San Diego business wishes to take on an unpaid intern, you must meet all of the following requirements:

  • The internship must be part of an established course at an accredited school.
  • The intern(s) must be trained to work in a specific industry.
  • The intern(s) must not displace any regular employees.
  • The internship must be supervised by a school or agency.
  • The intern(s) must not receive any benefits or health insurance.
  • The intern(s) must be aware that the internship is unpaid.

Though the state regulations are quite similar to the federal rules, there are some key differences to be aware of. Before your company takes on an unpaid intern, you would be well-advised to consult with a California employment compliance attorney to make sure that everything is handled correctly.

What Happens if an Internship Program Does Not Meet State or Federal Requirements?

Generally speaking, if your company’s internship program is not compliant with the law, the intern will become classified as a traditional employee. They will then be entitled to earn at least the minimum wage. You may even be required to provide them with benefits. If you would like to avoid this nightmare scenario, you should speak to a business attorney in San Diego before taking on an unpaid intern.

Your California Employment Compliance Attorney

Here at the Semanchik Law Group, we love nothing more than helping local businesses run smoothly, efficiently, and legally. If you would like our experienced team to provide you with compliance advice or guidance, all you need to do is give us a call at (619) 535-1811 to set up an initial consultation.