A simple google search for “Cannabis Intern” turns up around 340,000 results. As an employment attorney, the word “intern” is a major red flag for me — right up there with “independent contractor.” Why? Because “intern” positions are often misused and many businesses, even sophisticated ones, believe labeling someone an intern means you do not have to pay them.
Employers can—and in certain situations encouraged to—hire interns. Properly classified interns do not have to be paid minimum wage. Employers may have the best intentions hiring an unpaid or low-paid intern. They truly believe the worker will obtain important training and education from the position. That might even be true. But, if a person is providing a service for an employer and is not paid or is paid under minimum-wage, employers could be in a lot of trouble for violation of both state and minimum wage laws.
What makes an intern actually an intern rather than an employee of a company? The U.S. Department of Labor has a seven-part test for determining the status of interns . When evaluating the employment relationship between an employer and an intern a court will consider:
- How similar the training is to that which the worker would receive in an educational environment;
- The extent to which the training is tied to a formal education program with integrated coursework and academic credit;
- The extent to which the program accommodates academic commitments by corresponding to the academic calendar;
- The extent to which the internship’s duration is limited to the period of beneficial learning;
- The extent to which the internship complements rather than displaces the work of paid employees while providing significant education benefits;
- The interns are not necessarily entitled to a job at the conclusion of the training period; and
- The employer and the intern understand that the intern is not entitled to compensation for the time spent in training.
No single factor is determinative, but as you can tell there is a common theme of education. Typically, if the worker is receiving some sort of educational credit for the work, they are an intern. If the worker is improperly classified as an intern and has not been receiving pay, then wage and hour laws apply. As previously discussed, failing to pay minimum wage can come with hefty penalties.
If you’re considering hiring an “intern” for your marijuana business, its best to consult with an employment law expert beforehand to provide a legal analysis of whether the position is truly one fit for an intern. After all, even if a state agency considers the “intern” qualified to work in your marijuana business, that doesn’t necessarily mean you can have them work for free.