The U.S. Department of Labor recently abandoned its six-factor internship test in favor of the seven-factor primary beneficiary test utilized by most Courts. The primary benefit test adopts a temporal limitation for the internship that was not in the old six-factor test and incorporates two elements linking eligibility to the intern’s education programs and academic commitments.  For employers already using internship programs, they should review their policies, agreements and forms to incorporate the new test elements.  Employers considering whether to implement an internship program should tailor the program to insure the individuals can properly be classified as interns rather than employees using the current factors that the DOL described as follows:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. A promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The analysis remains a fact specific inquiry and is intended to be a flexible test.  You can review the DOL’s Fact Sheet on internship programs here.