Important Information Regarding Interns in New Hampshire

New Hampshire businesses who have unpaid interns or students should be aware of the applicable state law and federal laws.  First, under New Hampshire law, the New Hampshire Department of Labor (“NHDOL”) requires prescreening for any business that intends to have unpaid interns pursuant to the authority of RSA 279:22-aa and Chapter LAB 805.04.  Specifically, as part of this prescreening process, a business must provide the NHDOL with specific information, including but not limited to, the name of the school, the contact persons from the school, the business name, federal ID of business, address of worksite, total number of employees employed in New Hampshire, contact name of the work site, and telephone number. The NHDOL will then evaluate the information, including the business’s history of compliance with various New Hampshire laws and safety program, to determine if it will grant approval, which is good for one year.  Unpaid internships must be also approved by the NHDOL under Chapter LAB 805.02.  More information is available on the NHDOL website, www.nh.gov/labor, linking to the Frequently Asked Questions and then the topic of School-to-Work.

In addition, employers and interns should review the January 5, 2018 Field Assistance Bulletin No. 2018-2, “Determining Whether Interns at For-Profit Employers Are Employees Under the FLSA.”  In 2010, prior to this Field Assistance Bulletin (“FAB”), the Wage and Hour Division (“WHD”) issued Fact Sheet No. 71 regarding determining whether a person was properly classified as an intern.  Fact Sheet No. 71 stated that every intern and trainee would be an employee under the Fair Labor Standards Act (“FLSA”) unless his or her job satisfied each of the 6 specified factors.  Courts, however, held that such a 6 part test was overly rigid since the United States Supreme Court precedent required a “more holistic analysis.”  Thus, WHD, in issuing the FAB in January 2018, rescinded Fact Sheet No. 71 (as well as Section 10b11 of the Field Operation Handbook).

The FAB clarifies the factors that will be considered when the WHD is determining whether interns or students are in fact employees and entitled to minimum wage.  Basically, this FAB states that WHD will use the “Primary Beneficiary Test” to determine whether an intern/student is an employee, with no one factor being dispositive and no need for every factor to support that the person is an intern.  The 7 FAB factors are:

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.

The bottom line is that both businesses and interns should make sure that the internship program meets both state and federal laws.

About the Author: Jennifer Eber

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