The practice of hiring interns has become widely recognized across different organizations. Determining whether an intern is considered an “employee” under the Fair Labor Standards Act (FLSA) has been a troubling task for most organizations until now. The Department of Labor has recently updated Fact Sheet #71: “Internship Programs Under the Fair Labor Standards Act,” and have adopted a “primary beneficiary test” that has been used by the courts to determine whether an intern (or student) is an employee under FLSA.

The updates stem from recent court cases in which former interns are taking legal action against the organizations they interned with, claiming the employer owes them wages for work completed during their internship. The “primary beneficiary” test was first set forth by Glatt vs. Fox Searchlight Pictures, Inc. In this case, the Plaintiffs claimed that Fox Searchlight Pictures, Inc. violated the FLSA and the New York Labor Law when the company failed to compensate them duri