Labor expert Miljoner explains paid, unpaid internships

When it comes to federal regulation of labor on Long Island, Irv Miljoner is the law.

As the director of the U.S. Labor Department's local wage and hour office, Miljoner oversees the enforcement of federal labor laws on Long Island.

One new wrinkle on the labor scene: Increasing numbers of unemployed college grads are opting for unpaid internships. The Labor Department has sued some employers over the years, alleging that their unpaid interns should have been paid.

Some companies have taken their appeals all the way to the U.S. Supreme Court. And those rulings, Miljoner said, determine "when interns have to be paid or not." Newsday spoke with Miljoner, head of the local office since 1996, about the legal ins and outs of paid and unpaid internships. Following are excerpts:

We get a lot of inquiries but not very many complaints. I think in the broader employment community, internships are more and more valuable and precious. And so even if an intern was employed in violation of the law, he or she is probably happy to have the position and is less inclined to complain.

When we get those calls it is simply: "Are we supposed to get paid?"

It can legally be unpaid when the internship is seen as being for the benefit of the intern rather than the employer. Most commonly this means as an extension of his or her education.

More to the point, certain criteria must be met in order for the intern not to be paid or to be considered other than an employee. If they're considered an employee, then by definition they must be paid.

The first criterion is [that] the internship be similar to or have aspects of education and training similar to what the intern would get in an educational environment. So it has to mirror what they are studying at school. Another important one: The intern cannot displace a regular employee. They are if someone were terminated in favor of this intern. That would defeat any of the other provisions, and that person [intern] would have to be paid . . .

Another one is the intern cannot be promised and is not necessarily entitled to a job at the conclusion of the internship.

And the last one is that there is an understanding going in on the part of both the employer and the intern . . . that they're not getting wages . . . If an intern comes to me and says, "Yeah, I got the internship. I was excited. It supplements my education . . . but I didn't know I wasn't going to get paid." That in and of itself would defeat the nonpay status of the intern.

From past experience it would be in business and finance, in law offices as well, but really it could be in any sort of business. But the tendency would be in white-collar professional type venues.

If they're a paid intern, they're also an employee and have to paid minimum wage and overtime . . . If it's firmly established that . . . they are an intern, then by definition the hour provisions of the Fair Labor Standards Act would not apply to them.

Back wages would be a remedy. Whether there would be a penalty imposed would depend on whether it was a repeat violation or a willful violation. Willful would mean in short that [employers] knew or should have known by our determination that this was a violation of the law.

-- For a fact sheet on internships and labor laws, go to http://1.usa.gov/N5H8J3

-- For more details on a Supreme Court ruling on interns, go to http://1.usa.gov/NtLed1