Don’t let an unpaid internship cost your firm a lawsuit

Don’t let an unpaid internship cost your firm a lawsuit – Employment Practices Risks

Is your firm is planning to add an unpaid intern to staff this summer?  Then it would be a good time to review the six-point test included in the US Department of Labor’s Fair Labor Standards Act:

  1. The internship must be for the intern’s benefit.
  2. Training appropriate to an educational environment must be given.
  3. The employer should realize no immediate advantage from the intern.
  4. The internship does not entitle the intern to a job following completion of the program.
  5. The employer must advise the intern no financial compensation will be gained.
  6. No regular employees should be displaced, while the intern should work with close staff supervision.

Following are additional guidelines:

  • Review your firm’s policy regarding anti-discrimination and anti-retaliation policies, grievance management and any other protections enjoyed by paid employees before admitting an intern to your workplace.
  • Examine local state wage and hour laws.
  • Provide the intern with a detailed program description and a statement confirming your program complies with labor laws.

We recommend a stand-alone EPL policy for the broadest possible coverage, given the potential financial risk attributable to an employment related lawsuit. A KMRD account representative will be happy to analyze your risk and outline your coverage.

Contact your trusted, knowledgeable KMRD Partners relationship manager to review your organization’s insurance coverage before one minute from normal strikes.  

For more information on Employment Practices Liability Risks, click here.

KMRD reduces the overall cost of risk by producing a greater value for each commercial insurance dollar spent, while utilizing an enterprise risk management approach to engineer the optimal solution.

We are dedicated to the mitigation of risk, safety and loss control and claims advocacy, while helping firms recover from unplanned events that wait on the other side of one minute from normal.

To identify and correct coverage and service gaps in your insurance coverage contact us at before one minute from normal strikes.

Need to deliver better risk management results for your company? Schedule a brief demo of our unique collaborative risk management system, KMRD XChange.

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