Interns and Volunteers Under the Fair Labor Standards Act

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Outstretched Hands
By Paul J. Welk, PT, JD*

Let’s consider the following hypothetical.

A high school student from the local community reaches out to a physical therapy private practice asking if she can come into the office over the summer to get a better idea of what physical therapists do in their profession. After some consideration, the practice owner agrees to allow this individual to come to the clinic. Only after agreeing to this arrangement does the clinic owner start to consider the status of this student. Is she a volunteer? Is she an intern? Is she an employee?

Many physical therapy practices, like other businesses, have formal internship or similar programs as a method for accommodating requests like the example given. In the employment law context, questions from practice owners often arise as to whether interns and volunteers are required to be compensated as employees under the Fair Labor Standards Act (FLSA). This article will examine interns and volunteers and when individuals may be considered employees under the FLSA.

The FLSA defines the term “employ” very broadly to include “to suffer or permit to work.” However, in interpreting the FLSA, courts have noted that it is not intended to include all individuals as employees, for example, those who do not have a compensation arrangement and may work for their own advantage for another.

In the case of volunteers, guidance issued under the FLSA distinguishes between volunteers for public service, religious, or humanitarian objectives as compared to volunteers in the for-profit private sector. Specifically, the FLSA guidance provides that, for example, a men’s or women’s organization may send its members into a hospital or nursing home to provide personal services for the elderly. In general, the FLSA would consider these individuals who donate their services, commonly on a part-time basis, not as employees of the organization, but as volunteers. The FLSA distinguishes this type of service (i.e., public service, religious, or humanitarian) from that in the for-profit private sector. Specifically, under the FLSA, employees may not volunteer services to for-profit private sector employers. As a result, in general for-profit private sector employers would be required to compensate individuals for hours worked unless they qualify as an intern. This result is due to the fact that employees must be paid at least minimum wage and be paid overtime unless they otherwise are exempt under applicable law.

Interns are treated differently than volunteers under the FLSA. In 2018, the U.S. Department of Labor Wage and Hour Division published Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act. This Fact Sheet provides guidance to assist in determining whether an intern is entitled to minimum wage and overtime pay under the FLSA. In short, the test for interns looks at the relationship between the intern and the employer to determine who is the “primary beneficiary” of the relationship. The Fact Sheet describes the following factors as part of the “primary beneficiary” test, noting that the test is flexible in nature and that no single factor is determinative:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any 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.

After analyzing a particular arrangement under the test, if it is confirmed that the intern is not an employee, then the intern is not entitled to minimum wage or overtime pay under the FLSA. However, if the intern is an employee, the intern would be entitled to minimum wage and overtime.

In structuring a physical therapy practice’s internship program, it is important to consider the FLSA as well as any applicable state laws, which may offer greater rights than the FLSA to volunteers, interns, and employees. Initially, practices should consider how to best document that there is no expectation of compensation in a particular arrangement, for example, by requiring an intern to sign an offer letter accepting participation in the internship program and acknowledging that it is unpaid. In many circumstances, interns in physical therapy private practices will be performing services as part of their formal education and training, a fact that certainly favors the intern not being deemed an employee under the primary beneficiary test. For circumstances in which a practice desires to provide for an unpaid internship outside of the formal education process, consideration should be given to issues such as the relevancy of the experience to the individual’s education (such as whether the internship hours are required to apply for an academic program), the length of time of the internship program, and other characteristics of the program (mentoring, offering a variety of different experiences, training materials, practical application, etc.). Additionally, an internship program should not be designed to displace the work of a paid employee. By considering the guidance offered by the Department of Labor as well as applicable state and local laws, private practices can structure internship opportunities that mitigate the risk of improperly classifying an individual and suffering the adverse consequences of the same.


References

129 U.S. Code § 201 et seq.

2This article assumes that volunteers and interns, to the extent employees, would be non-exempt employees.

329 U.S. Code § 203

4air Labor Standards Act Advisor, See https://webapps.dol.gov/elaws/whd/flsa/docs/volunteers.asp. Accessed August 28, 2019.

5Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act. www.dol.gov/whd/regs/compliance/whdfs71.htm. Accessed August 28, 2019.

Paul Welk

Paul J. Welk, PT, JD, is a PPS member and an attorney with Tucker Arensberg, P.C., where he frequently advises physical therapy private practices in the areas of corporate and health care law. Questions and comments can be directed to pwelk@tuckerlaw.com or (412) 594-5536.

Please note that this article is not intended to, and does not, serve as legal advice to the reader but is for general information purposes only.

*The author has a professional affiliation with this subject.

Copyright © 2018, Private Practice Section of the American Physical Therapy Association. All Rights Reserved.

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