Fall 2005-03 Employee or trainee

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Number 61
Fall 2005

Employee or trainee?

Is a student required to receive a number of hours of training in a work environment an employee or a trainee?

If an "employee" during training hours, does he or she have to be paid? The Wage and Hour Division of the U.S. Department of Labor, interpreting the Fair Labor Standards Act, stated in relation to this issue that it will depend upon the circumstances surrounding their activities on the premises of the employer. If all of the following criteria are met, the trainees or students are not employees within the meaning of the FLSA:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school.

2. The training is for the benefit of the trainees or students.

3. The trainees or students do not displace regular employees, but work under their close observation.

4. The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion his or her operations may actually be impeded.

5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period.

6. The employer and the trainees or students understand that the trainees or students are not entitled to wage for the time spent in training.

Where educational or training programs are designed to provide students with professional experience in the furtherance of their education and the training is academically oriented for the benefit of the students, the students will not be considered employees of the institution to which they are assigned, provided the six criteria referred to above are met. For example, where certain work activities are performed by students that are but an extension of their academic programs, the Department of Labor would not assert that an employer-employee relationship exists for the purposes of the FLSA.

In situations where students receive college credits applicable toward graduation when they volunteer to perform internships under a college program, and the program involves the students in real life situations and provides the students with educational experience unobtainable in a classroom setting, an employment relationship does not exist between the students and the facility providing the instruction.

Where there is no employment relationship under the FLSA, the minimum wage and overtime pay provisions of the FLSA have no application to the interns in question. It should be noted that the payment of a stipend to the interns does not create an employment relationship under the FLSA as long as it does not exceed the reasonable approximation of the expenses incurred by the interns involved in the program.

However, trainees must be distinguished from employees who are also receiving training. A trainee is someone who does not yet occupy an employment position. A person who has a paid job and is being trained for that position or a different one is not a trainee. The issue of compensating individuals who are being trained without formally occupying an employment position is considerably different from that of existing employees who pursue further training.

Employers should require from the person in question to produce a certification from the academic institution to the effect that the training is an academic requirement for credit applicable towards graduation, before allowing said arrangement.


© 2005 Goldman Antonetti