DOL Updates Test For Unpaid Interns And Students Under The FLSA

On January 5, 2018, the U.S. Department of Labor (DOL) announced that it would no longer be using the six-factor test it had adhered to since 2010 to determine whether interns are employees — and consequently, entitled to minimum wage and overtime — under the Fair Labor Standards Act (FLSA). Instead, the DOL will now utilize the "primary beneficiary" test articulated by several U.S. Circuit Courts of Appeals (including those covering New York and California) to make such a determination.

The Six-Factor Internship Test

Under the DOL's prior standard, an internship fell outside the reach of the FLSA, and therefore, could be unpaid, only if all six factors were met – one of which was that the employer "derive[s] no immediate advantage from the activities of the intern" and another of which stated that the internship had to be "for the benefit of the intern." However, this rule was rejected as overly rigid by the courts — the first being the Second Circuit Court of