Hiring Summer Interns

Arizona Internship Laws: FLSA Guide and Best Practices

Why Arizona internship laws matter to employers

As summer approaches, many Arizona businesses are preparing to welcome interns into their workforce. Internships can provide valuable experiences for students and recent graduates while offering companies fresh perspectives and potential future employees. However, it’s crucial for employers to understand the legal implications of internship programs to ensure compliance with both federal and state labor laws.

Understanding the Fair Labor Standards Act (FLSA)

The FLSA sets the standards for minimum wage, overtime pay, and other employment practices. Under the FLSA, interns in the “for-profit” private sector are typically considered employees and are entitled to compensation unless the internship meets specific criteria.

The “Primary Beneficiary” Test

To determine whether an intern must be paid, courts apply the “primary beneficiary” test, which assesses who benefits most from the internship—the employer or the intern. If the intern is the primary beneficiary, the internship may be unpaid. The Department of Labor outlines seven factors to consider:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation.
2. The extent to which the internship provides training similar to that given in an educational environment.
3. The extent to which the internship is tied to the intern’s formal education program.
4. The extent to which the internship accommodates the intern’s academic commitments.
5. The extent to which the internship’s duration is limited to the period in which it provides beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at its conclusion.

If analysis of these factors indicates that the intern is an employee, they must be compensated accordingly.

Arizona Internship Laws: FLSA Guide and Best Practices

In addition to federal laws, Arizona employers must adhere to state-specific regulations. For instance, the Industrial Commission of Arizona imposes restrictions on the working hours of minors under 16, especially during school sessions.

Best Practices for Employers Regarding Arizona Internship Laws

To ensure compliance and foster a positive internship experience:

• Provide Clear Documentation: Draft a comprehensive internship agreement outlining the nature of the internship, expectations, and acknowledgment that there is no guarantee of employment or compensation unless applicable.
• Focus on Education: Design internship programs that offer educational benefits, training, and mentorship, aligning with academic or vocational objectives.
• Avoid Replacing Employees: Ensure that interns are not performing tasks that would typically be assigned to paid employees, which could indicate an employment relationship.
• Consult Legal Counsel: Before initiating an internship program, consult with an employment attorney to review the structure and ensure compliance with all applicable laws.

Conclusion

Internship programs can be mutually beneficial when structured correctly. By understanding Arizona internship laws, FLSA Guide and Best Practices, Arizona employers can provide valuable experiences to interns while safeguarding their organizations against potential legal issues.

Stay ahead by reviewing Arizona internship laws before each hiring season.

For personalized guidance on structuring compliant internship programs, contact The Foster Group today.