Summer internships are starting up across the Garden State, but if companies aren't careful, they could unknowingly be landing themselves in some legal hot water.

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There's no such thing as a free lunch, and the same goes for the world of internships. By federal law, an intern must be paid minimum wage and overtime if certain criteria aren't met.

Kathleen Caminiti of Fisher & Phillips, a labor law firm in Murray Hill, has seen some businesses eliminate their internship programs altogether due to the law.

"The primary activity of the intern must be educational as opposed to productive work for the employer," Caminiti said.

Furthermore, an intern cannot take the place of another employee. If an intern is doing clerical work or essentially filling in for someone else's summer vacation, that intern is technically being treated as a temporary employee.

"They'd have grounds to either file a claim with the Department of Labor, or a lawsuit," Caminiti said

Many times, employers aren't trying to get away with having work done on the cheap. They could be unfamiliar with the rules, perhaps just helping a friend's kid gain experience in the field. But in this case, no good deed goes unpunished.

To guarantee an intern does not have to be paid, the U.S. Department of Labor lists the following six criteria on its web site:

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.