Internships, both paid and unpaid, are popular across nearly every industry throughout the country and in Massachusetts. Many companies, however, offer unpaid internships based on an often mistaken belief that an intern does not need to be paid minimum wages. In Massachusetts, this could not be farther from the truth, as the Massachusetts minimum wage law requires all individuals, regardless of whether or not they are classified as interns, to be paid at least the state minimum wage unless one of five exceptions apply. They are as follows: (1) someone providing professional service; (2) agricultural or farm workers; (3) people being rehabilitated or trained under rehabilitation or training programs in charitable, educational or religious institutions; (4) members of religious orders; and (5) outsides sales workers who don’t make daily reports or visits to the office or plant of their employer. If your intern does not fit into one of the exceptions, they must at least be paid the state minimum wage for their time working as an intern.
What is professional service?
While there is scant case law in the Commonwealth interpreting the meaning of “professional service” under Massachusetts minimum wage law, the Massachusetts Supreme Judicial Court has interpreted this phrase as part of an insurance contract to mean:
“A `professional’ act or service is one arising out of a vocation, calling, occupation, or employment involving specialized knowledge, labor, or skill, and the labor or skill involved is predominantly mental or intellectual, rather than physical or manual…. In determining whether a particular act is of a professional nature or a `professional service’ we must look not to the title or character of the party performing the act, but to the act itself […] that membership in a profession has traditionally been recognized as requiring the possession of special learning acquired through considerable rigorous intellectual training.”
Because there is limited guidance on this issue from state courts within the Commonwealth, the Massachusetts courts would also likely look to guidance in federal regulations defining overtime-exempt professional workers. These regulations state that a professional worker must mostly do work requiring advanced knowledge, predominantly intellectual in character, which includes consistent exercise of discretion and judgment. The advanced knowledge must be in a field of science or learning, or be of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. The advanced knowledge must also be the kind usually acquired after a long course of specialized intellectual instruction.
Thus, a lawyer or doctor would clearly be providing professional services, but most interns, especially those in or right out of college, would likely not be.
What is a training programs in charitable, educational or religious institution?
Under Massachusetts law, only training programs through charitable, educational or religious institutions can be unpaid. Even if the internship is through a charitable, educational or religious institution, it must be a true training program.
There is a list of six characteristics of a training program under federal law, and these factors are used by the Massachusetts Department of Labor Standards to determine if someone working with a charitable, educational or religious institution can be legally unpaid. These are the factors: (1) the internship is similar to the training which would be given in an educational environment; (2) the internship experience is for the benefit of the intern; (3) the intern does not displace regular employees, but works under the close supervision of the existing staff; (4) the employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded; (5) the intern is not necessarily entitled to a job at the conclusion of the internship; and (6) the employer and intern understand that the intern is not entitled to wages for the time spent in the internship.
The second and fourth factors above call into focus what an unpaid internship is supposed to be all about. An internship is supposed to be about the intern’s benefit and not about free work for the employer. Even if an internship is with a charitable, educational or religious institution, it must be to help and train the intern. If it is not, it must be a paid internship.
If your company offers unpaid internships, you should consult with an attorney at Rudolph Friedmann to ensure that it is in compliance with all applicable Massachusetts wage laws.