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Exempt Intern in CA? California

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  • Exempt Intern in CA? California

    Is it legal in CA to have an "intern" classified as salaried exempt?

    Although it's call an "intership", I don't believe it is actually a true internship position. There is no association with a school or third party agency to facilitate a intership program; no credits are involved.

    The offer letter states that it is for position of "Engineer (Intern)". It is an exempt position, with a monthly salary.

    To me, this should be a regular or temporay position job offer.

    What is distrubing is that I hear this candidate is on some type of student visa that does not qualify him to work more than 20 hours/week. However, the position we are offering him is very much a 40 hours/week job. He has agreed that to work 40 hours, but will report only 20 hours, if we compensate him elsewhere.

    This is sending all kinds of red flags and I am surprised HR has generated an offer like this out.

    Since I am not an HR professional, I wanted to get feedback from all you HR gurus out there. The situation just reads wrong to me. Am I right in what I am sensing? What are some other potential violations faced here?


  • #2
    This is sending all kinds of red flags and I am surprised HR has generated an offer like this out.
    I'll no doubt get some flak on this one... but you have a obligation to notify ICE/Immigration services.

    There are more than one ''legal'' issue here. What your HR dept is doing is but one part of this.


    • #3
      The OP is mixing up some unrelated issues. Under federal rules, interns are unpaid, period, no exception. And there are some serious rules associated with interns.

      You need to see if the normal I-9 rules are being passed. Using magic words like "interns" or exempt salaried" do not change this. Those are all federal DOL terms, while the I-9 form belongs to ICE, who could not care less that the employer has learned a few DOL terms unrelated to whether or not the employee can actually legally work, or whether or not there are legal restrictions on how many hours per week can be worked. These are stricly ICE issues. There is nothing other federal or state agencies have to say about this.

      Unrelated to this, if you pay the person, they are not legally an intern. Legally an intern is a college student who is working as part of the eduction, who is NOT paid, and for whom the employer gets not benefit from the hours worked. Plus a few other rules.

      Then unrelated to these other issues, all employees are inherently non-exempt until/unless the employer can support a specific Exempt classification. What is the specific Exempt classification you feel this employee qualifies for?
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)


      • #4
        Can elaborate on what violations you see here?

        We're a fairly young company that has grown very fast. I don't think it was intentional on HR's part, but just doesn't know any better. I'm hoping to discuss this with them and hopefully have it corrected. But before I do so, I need to have documented information to support it.



        • #5
          I thought I just did, but start with the I-9 testing. If that fails, the candidate employee cannot work at all. If there are visa related restrictions, then those restrictions must be complied with. Nothing outside of the I-9 world can alter these requirements. Most of what you need to know can be found on the I-9 form. The rest can be found by going over the ICE website and downloading the I-9 employer manual (or whatever they call it).

          Interns are an obscure exception. Read the DOL opinion letter I previously cited. The chances that you legally have an intern is poor. And there is no such thing as a paid intern. If you pay them, they are not an intern.

          Past that, you are in CA. The default is that you pay your employees at least $8/hr, plus daily overtime. No employee is ever Exempt from overtime or minimum wage unless the employer can prove this is true. And I also gave you a cite for that.
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)


          • #6
            DAW - I believe we crossed post. I was not directing it to your post.

            I agree with what is been said here. But being that I am not in HR, I just needed verification from folks that are in HR.

            Yes, there are separate issues here - immigration & DOL. This is what is making it even more confusing.

            1) Intern or not intern - I don't believe this person is an intern, nor should be referred as one, although our HR is calling it that. There's no affiliation with any school intership programs, and nothing about it satifies DOL's definition of an intern.

            My opinion is that this is a regular paid position and should be classified as an employee.

            Question: Does it matter, or legally okay to have the offer letter say intern? It reads: "Engineer, Systems (Intern)"

            if you pay the person, they are not legally an intern.
            Is this really true? I thought I read somewhere that there could be a combination of school credits along with pay supplement for interns.

            2) Exempt/non-exempt - Being that 100% of our engineers are exempt positions, I think if this person was indeed an employee then yes, we can support the classification. However, my question is if it's okay to paid only a salary (quoted as a monthly and annual salary on offer letter) for a part-time and/or temporary employee? I always thought (and very possible mistaken) part-time and temporary employees were paid based on hourly wages, rather than salary. Is this a common practice?

            3) I9 - The immigration status is unclear to me right now. I just know he's on a special visa and there some restriction tied to it. But I'm highly disturbed that if his work hour are indeed limited, that our HR would actually entertain the idea of hiring him to work full-time and lie about it. I am hoping this is not the case.


            • #7
              1. I gave you a cite to a DOL opinion letter containing the rules for interns. Have you read it yet? The opinion letter list six factors all of which must be true for the person to be an "intern" under the DOL rules. One of the six rules is no pay.

              Now if you want to just call person an "intern" or a "banana" or something else under the theory that it just a word that means whatever you want it to, fine, as long as you do not try to use the intern classification to avoid any of the normal DOL rules such as minimum wage or overtime. The whole point of "interns" under the federal FLSA law is that it is a very limited legal exception to certain federal law requirements (such as minimum wage and overtime). IMO, calling someone an intern (a legally specific word) when you do not really mean it is confusing, but as long as you do not try to go around FLSA requirements, no harm, no foul.

              2. If you are saying that the employee is Exempt under the CA version of the Engineering classification, then you (the employer) is basically saying that you are fully responsible for insuring that all related rules are being followed. CA Wage Order #4 is probably the best place to find those rules.

              There is no problem with part time per se, but part time does not change the rules. For example, one of the CA rules is a minimum salary of $640/week. The fact that the employee is part time in no way lowers that limit.

              The other problem is not the word "intern" per se, is that it would be a huge flag if audited. For an employee to be Exempt under the Professional exception means that they already have their degrees and professional qualifications in place prior to the employer declaring them Exempt. Not exactly consistent with a so-called intern.
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)


              • #8
                For what it is worth, I am used to the term "intern" being used differently from the federal definition that DAW has provided. My company and others that I am familiar with use the term for temporary or part time workers, usually students full time during the summer with the chance of part time during the school year. They are typically hired for tasks related to their majors, however, they are paid and there is no academic credit involved. But, there is often coordination with the placement departments in the local universities.

                The positions are always non-exempt and typically pay in the range of $10 - $12 per hour. There is no attempt to avoid paying overtime or complying with any of the rules. I'd say we use it more as part of the job title then as any form of classification. But, to people in our industry, it is common to use it that way. I found DAW's information on the official DOL definition to be educational. It is also a good way for us to get a look at students who will be graduating in a year or two, potentially to bring on as regular employees.
                Last edited by Scott67; 09-24-2009, 05:43 PM.
                Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.