United States: Is There An Intern In Your Future?

Last Updated: April 10 2013
Article by Tamsen L. Leachman

There was a significant increase in the number of class-action lawsuits in 2012 brought by former interns, many of whom were in unpaid positions working in the business sector.  But recently the educational community received a wake-up call when Hamilton College was hit with a class-action lawsuit involving its paid interns.

The Facts

In the Hamilton College case, former employee Benjamin Kozik, representing a class of over 40 former interns of the athletic department, claimed that his role as an intern as Intercollegiate/Assistant Football Coach did not qualify as exempt internship (for which minimum wage and overtime requirements did not apply);  that he was not an exempt educational employee;  and that the stipend he received each month was not enough to properly compensate him for all the regular and overtime hours he worked. 

As a result, Kozik is seeking unpaid overtime wages of up to 40 hours per week, liquidated (double) damages, interest, and attorneys' fees. Kozik is also asking the court to award similar amounts for each of the other members of the intern class.  While no total damage figure is provided, these claims could easily reach over $5,000,000.  This figure does not include the possible award of attorneys' fees and other litigation costs which could add another $1,000,000 to the total.

The Hamilton College case serves as a stark reminder that internship programs – even paid ones – come with risk and should be carefully constructed and periodically reviewed to ensure that they do not run afoul of state and federal wage and hour laws.  As we reflect on the new scrutiny of internship programs, several critical lessons arise.

Lesson #1: Many "Interns" Must Be Paid Minimum Wage And Overtime Pay

In most cases, workers are entitled to be paid at least minimum wage for all hours they work,  and overtime pay for those hours above 40 in a workweek.  Unfortunately, there is not a simple and easy-to-apply test to determine when this rule may be ignored and the internship treated as an unpaid position. In broad terms, to qualify as a legitimate unpaid (or minimally paid) internship program, its purpose must be educational.  The program must provide learning, instruction and training that imparts broad, significant, substantive, and transferrable knowledge. In addition, the program must create an experience that is consistent with these purposes.

What this means in practical terms is that, if an intern is asked to perform routine or productive work that directly benefits the organization or that would otherwise have been performed by an employee, it will not qualify as a legitimate unpaid internship.  As a result, if an intern is asked to assist the soccer coach with training drills (productive work), help clean up the school after an event (routine work), or travel with students to school events or games (productive work), the viability of the internship program could be placed at risk and, as a result, all time worked by the intern could be subject to minimum wage and overtime requirements.

Lesson #2: Mistakes Are Costly

Pay mistakes are expensive in even the most limited situations.  The cost of these mistakes quickly compounds, however, when legal requirements are misunderstood or where an internship program is structured properly but administered in a manner that does not comply with wage-hour rules. 

In these situations, a former intern may be able to assemble a group of other interns who had a similar experience and, with the assistance of counsel, create a class action claim based on similar allegations, harm, and damages.  The risk to schools is increased because of the high cost of litigating these matters in addition to the increased risk that claims can become more believable if multiple people are telling similar stories.

Lesson #3: Records Are Critical – Especially If Something Goes Wrong

If your internship program is challenged, having key records will be important in responding to a claim and putting together your defense.  For example, a memorandum of understanding (MOU) that is presented to and signed by the intern can be a compelling piece of evidence if it confirms facts that make an internship program legitimate, such as:

  • the unpaid nature of the internship or the limited pay provided;
  • that a position is not guaranteed after completing the internship;
  • the educational purpose of the internship and the intent to benefit the intern (and not the school);
  • the limited scope of activities that will be performed by the intern; and
  • the intern's obligation to promptly report any assignment of duties or activities that are outside the identified scope.

 In addition, time records may also become critical should interns be successful in arguing that they were not part of a qualified internship program and were instead entitled to at least minimum wage and overtime.

Without such records, interns will be permitted to estimate the hours worked. If your school disagrees with the estimate, it must do more than dispute the claimed hours – it must prove the inaccuracy. This is because the employer, not the intern, is required to maintain time records.  When accurate time records are not created and maintained, the employer is ultimately responsible.

Lesson #4: Follow Best Practices In Deploying Your Internship Program

If you have made it this far and still plan to adopt or continue an internship program, it may be helpful to review the following best practices and identify those that target your area of vulnerability and may assist in reducing your risk of liability:

Consider an Audit

If you have an existing internship program, an audit can be a helpful tool in determining if you have an appropriate educational purpose for the internship and if the activities the intern performs will benefit the intern rather than the school.  In addition, the audit can help confirm that the activities of the intern are not the same as the duties that are or would be performed by another employee. 

Train Supervisors Who Work With Interns

Even the best program can be derailed by a supervisor who does not understand the importance of selectively assigning experiences and activities to interns.  Training can help supervisors utilize interns appropriately and prevent expansion of responsibilities into areas that may disqualify your program.

Seek Another Solution If Necessary

If you discover that your program cannot be brought into compliance, consider discontinuing it or converting it to a paid program that complies with wage and hour requirements.

Document Key Aspects Of Your Internship Program

This is your chance to create self-serving documentation about your program, its purpose, and the narrow scope of intern activities that are authorized.  You may also want to include references to the training provided to those supervising the intern and the care taken to ensure the program is in compliance.

Secure Signed MOUs or Internship Agreements

As noted above, an MOU can be a powerful tool to clarify intent and secure agreement to report activities that are inconsistent with the educational purpose of the internship program. An intern's failure to timely report deviation from the agreed activities can help a school refute an allegation that it intentionally created a noncompliant program or allowed supervisors to misuse interns.

Create Checklists

Interns can also assist with the documentation process by keeping a checklist of agreed activities they are involved with during the course of the internship as well as confirming what they learned as a result.

To Sum It Up

Internship programs, whether paid or unpaid, create risks for schools if they are used as a substitute for low-cost or no-cost workers. Schools that take the time to plan and construct internship programs that are focused on the intern and provide them with an enriching educational experience have far less risk of challenge down the road. 

Hopefully the lessons arising out of the Hamilton College dispute will help you navigate the initial decisions and create a program that is designed to minimize liability and create the best educational experience for your interns.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Tamsen L. Leachman
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.