An Administrator's Guide to California Private School Law

Chapter 6 – Wage And Hour Laws

4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. 5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. 6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. 7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. The “primary beneficiary” test is intended to be flexible and no single factor is determinative. The unique circumstances of each case will be considered in determining whether a worker is an intern or an employee. The Ninth Circuit, which is the federal circuit that includes California, has applied the “primary beneficiary” test. 495 However, no California state court has affirmatively applied the “primary beneficiary” test and there is no state court opinion that discusses the standard for determining whether an worker is an intern or an employee. Instead, the California Division of Labor Standards Enforcement issued an opinion letter in 2010 that opines in order for a trainee or unpaid intern to be exempt from the state wage laws, all of the following criteria must be satisfied:

 The training, even though it includes actual operation of the school’s facilities, is similar to that which would be given in a vocational school;  The training is for the benefit of the trainees or students;  The trainees or students do not displace regular employees, but work under their close observation;  The school derives no immediate advantage from the activities of trainees or students, and on occasion the school’s operations may be actually impeded;  The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and  The school and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

Trainees/unpaid interns may not receive direct nor indirect payment in the form of wages or other remuneration for the activities performed for the school. However, trainees/unpaid interns may receive nominal expenses such as a stipend as long as it does not exceed the reasonable approximation of the expenses incurred by the trainee. Finally, the facts of any new trainee or intern placement must be reviewed on a case by case basis.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 151