Are Externs Employees?*

Are students in a university's externship program are considered employees under the Fair Labor Standards Act (FLSA)? According to the U.S. Department of Labor Employment Standards Administration, students who participate in an extern program are not employees of the companies that sponsor them.

A college or university operates an externship program to expose students to various careers so students are better able to make wise career decisions. In the program, the students spend one week "shadowing" an employee at a sponsoring employer. The students are not compensated for time spent at the sponsoring employer, nor do they receive college credit for their time. The purpose of the program is purely educational, and the sponsors invest significant effort into designing experiences for the externs. The students do not generally perform work for the employers, but may perform small office tasks or assist with a project. Because of the short duration of the program, the sponsors do not derive any benefit from the externs' labor, and the externs do not displace any regular employees. The only benefit to the sponsor, aside from satisfaction in assisting students' career development, is the potential opportunity to screen future interns or employees. The externs are not guaranteed future internships or employment from their participation in the program.

The FLSA provides minimum wage and overtime protection to those employed within the meaning of the Act. FLSA section 3(g) states that to "employ" means to "suffer or permit to work." The Supreme Court in Walling v. Portland Terminal Co., 330 U.S. 148, 152 (1947), observed that this definition "was obviously not intended to stamp all persons as employees who, without any express or implied compensation agreement, might work for their own advantage on the premises of another."

Based on Portland Terminal, the Wage and Hour Division (WHD) has developed six factors to evaluate whether a trainee, intern, extern, apprentice, graduate assistant, or similar individual is to be considered an employee. If all of the following six factors are met, then an employment relationship does not exist:

1. The training is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the trainees or students;
3. The trainees or students do not displace regular employees, but work under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the trainees or students, and on occasion the employer's operations may actually be impeded;
5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

In the typical externship or internship program, where the work activities are simply an extension of the student's academic program, these factors often are met and an employer-employee relationship does not exist. If no employment relationship exists, the provisions of the FLSA do not apply. The DOL Opinion is based exclusively on the facts and circumstances described in the request by the organization for an opinion.

*Adapted from an opinion letter from the U.S. Department of Labor Employment Standards Administration (Read the original letter.)