As the calendar turns over to summer months, it is increasingly common to see interns in workplaces across Maryland and throughout the United States. Unpaid or paid internships provide meaningful benefits to individuals and businesses alike. Interns receive valuable work experience in their chosen field, and businesses receive the value of the intern's labor.
Despite these advantages, it is critical for businesses to understand the laws surrounding internships. We have previously spoken about unpaid internships in this space. Since our last posting on this topic, there have been developments in these laws both at the state and federal levels.
What does Maryland law say about unpaid internships?
Under Maryland law, an intern is defined as follows:
- Someone an employer has not committed to hiring upon completion of the internship period.
- Someone who is not entitled to wages for his or her work.
- Someone who is supplementing their educational training, gaining beneficial experience, not replacing existing employees and is under regular supervision.
In 2015, Maryland enacted a law providing unpaid interns with similar protections against discrimination as employees. Specifically, employers are barred from discriminating against interns on account of various factors including race, age, sex, religion, national origin and other protected classes. This law also protects unpaid interns against retaliation and requires that disabled interns receive reasonable accommodations to perform their work.
Federal law involving unpaid internships
Federal law surrounding unpaid internships is similar in many ways to Maryland law. According to the Department of Labor, unpaid internships must meet these criteria:
- The activities the intern performs are similar to "training that would be given in an educational environment."
- The internship is for the intern's benefit
- The intern is not is not replacing employees and is being supervised by employees
- The business is not gaining "immediate advantage" from the intern's performance
- The internship is not guaranteed to lead to future employment
- Both the employer and intern are in agreement that the intern will not receive compensation
Federal courts in some areas of the United States have held that an internship does not have to be ONLY for the intern's benefit. Rather, as long as a company can show that the intern is the "primary beneficiary" of an internship, an unpaid internship is legal. It is important for Maryland employers to understand that the "primary beneficiary" rule does not apply in Maryland.
What can employers do to ensure legal compliance with their internship programs?
Given the benefits of internships to businesses and individuals alike, employers have strong reasons to continue these programs. In order to avoid litigation, however, businesses should consider the following strategies:
- Paying interns
- Sending interns a formal offer letter discussing the terms and conditions of the internship.
- Coordinating with colleges or universities, to ensure interns receive college credit for their labors
- Requiring regular hours and formal beginning and end dates
Internship and employment issues can be extremely complex, demanding legal counsel of the highest caliber. For years, the attorneys of Thatcher Law Firm have provided exceptional representation to employers and employees throughout Maryland and beyond.