Interns and trainees generally have high expectations; they have outstanding abilities and put forth great effort. Companies routinely pay very little to nothing in return for their hard work. And while this work arrangement might sound good to most employers, it could potentially cause issues. Non-compliance with California laws that apply to internships and trainees can subject employers to liability for overtime or minimum wage violations. Companies should understand these rules before allowing interns or trainees to work for them.
1. Trainees vs. Interns
Most unpaid or low-paid California workers who are still in school are technically trainees, not interns. Under special circumstances, there is a category of intern-like workers outside of the medical profession that may be exempt from state, federal overtime and minimum wage requirements. This could be in any field or profession. Employers are not required to pay minimum wages or overtime because the trainees are not considered employees (i.e. they are in training).
2. Rules for Trainees
Similar to interns, trainees usually receive little to no compensation from employers. The California Division of Labor Standards Enforcement (also called “DLSE”), which enforces California’s wage and hour laws, will carefully evaluate trainee arrangements to ensure that they are compliant.
Under California law, a number of requirements must be met before a trainee meets the DLSE’s standards. First, the trainee program (sometimes referred to as an “internship”) must be part of an established course of an accredited school or vocational training program, and a school or agency must supervise the training. Second, trainees must be trained to work in an industry, as opposed to performing work that can only benefit one company. Trainees must not displace employees or do the work a paid employee would usually perform, and trainees cannot receive employee benefits, insurance, or workers' compensation. Finally, any potential trainee must be aware that the “internship” is unpaid prior to starting.
While the requirements for approval for trainee programs/internships are similar under federal law, there are a few additional requirements. A trainee’s work must be similar to that which they would otherwise perform in a vocational school or program. The work needs to primarily benefit the trainees, not the employer. Finally, trainees cannot displace regular employees in performing the work. Additionally, trainees cannot be guaranteed a paying job at the end of their training period.
Click here to read California’s new labor and employment law requirements!
3. What Do Employers Need to Do?
When a trainee arrangement is invalidated by the DLSE, employers can be held liable for various penalties and damages, including the following:
- The difference between the applicable minimum wage and what a trainee was paid per hour that he or she worked (if anything);
- The double time or time-and-a-half pay for all worked hours in excess of 8 hours in one single day, on the 7th consecutive day of work, or in excess of 40 hours in one single week; and
- Fees ranging from one hundred to two hundred fifty dollars for each trainee who was not paid the proper minimum wages or overtime for each pay period during which the trainees were not properly paid.
Are you an employer who needs assistance in staying compliant with trainee laws in California? Click here to contact Hackler Flynn & Associates today!
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