Arkansas Unpaid Interns May be Eligible for Worker's Compensation
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FAQ
Employers who hire unpaid interns face potential legal troubles, including costly class action lawsuits. Recently, unpaid interns brought a class-action lawsuit against Mary-Kate and Ashley Olsen's entertainment company, Dualstar Entertainment Group, LLC.
If an intern is placed with the employer for a trial period with the expectation that he or she will then be hired on a permanent basis, that individual generally would be considered an employee under the FLSA.
Texas does not have separate regulations at the state level regarding unpaid internships. Instead, the Texas Workforce Commission advises employers to adhere to the six-prong test established by the DOL.
Unpaid internships are legal if the intern is the primary beneficiary of the arrangement. This is determined by the seven-point Primary Beneficiary Test. If an employer is the primary beneficiary, the intern is considered an employee under the Fair Labor Standards Act and entitled to minimum wage.
If you don't get the opportunity to ask those questions during or after the interview, consider doing so via email. Let them know how much you appreciate their time and ask if you can follow up with a few questions. At this point, simply ask them whether the internship is paid or unpaid.
In Texas, if a company has worker's compensation, interns are generally eligible for the same coverage as full-time employees.
Under workers' compensation law, an injury or illness is covered, without regard to fault, if it was sustained in the course and scope of employment, i.e., while furthering or carrying on the employer's business; this includes injuries sustained during work-related travel.
There are no legal limits on the number of hours an unpaid intern over the age of 18 is allowed to work. For undergraduate students still in school, unpaid internship hours per week are usually limited to 10 to 20.
In Texas, private employers can choose to carry workers' compensation insurance coverage, but it is not required in most cases. A workers' compensation insurance policy provides lost wages and medical benefits to employees injured on the job.
In general, Arkansas employers with three or more employees must carry workers' compensation insurance. Employers with fewer than three employees in certain industries, such as building construction, are also required to secure coverage.
