The answer is: Yes, there are potential legal issues with having an unpaid intern. Interns are generally covered by employment laws—if the law doesn’t allow a farm to have an unpaid employee (or an employee without workers’ compensation), the farm can’t have an unpaid intern (or an intern without workers’ compensation). Amanda, Ralph, and any other Connecticut farmer will have to read this chapter to determine their obligations.

Situations Where Interns Are Not Considered Employees

It is possible to have an intern who is not an employee where very specific criteria are met. In January 2018, the US Department of Labor (US DOL) updated its guidance on whether a worker qualifies as a non-employee intern. If the intern is not an employee, they are not covered by employment laws.

The US DOL now applies the “primary beneficiary test” which matches the more flexible approach that several federal appellate courts have recently developed. The “primary beneficiary test” reflects the principle that to be a non-employee intern, the primary beneficiary of the internship program must be the intern, not the farmer. Under this test, the US DOL evaluates the following seven criteria to determine whether a worker is the “primary beneficiary” of the relationship and thus a non-employee intern:

1. The farmer and the intern both understand that the intern is not entitled to compensation.

If a farmer chooses to have an unpaid intern, she needs to be sure to clearly communicate the arrangement with the intern. The best approach is to have the intern sign a statement at the get go acknowledging that this is an internship program and that limited or no compensation will be provided. Not only will this ensure that the farmer and the intern have a shared understanding that the position is unpaid or paid at less than the minimum wage, it provides proof that this arrangement was agreed to in advance should any issue arise.

2. The internship program provides training that would be given in an educational environment.

The farm must provide training to the intern. Ideally, this training is structured, or similar to a classroom style education. In addition, the training should be transferrable to other farms across the industry. In this way, the internship should prepare the intern for launching her career in farming or starting her own farm operation, not simply for working on that farm. Farms that establish set curricula and learning objectives and monitor the intern’s learning achievements are more likely to have a non-employee intern.

3. The intern receives academic credit upon completion of the internship program.

While academic credit is not essential, it can go a long way in helping the farmer establish a legally sound internship program. Having ties to an educational institution is an important risk management step when building a non-employment intern program.

4. The internship program corresponds with the academic calendar.

It’s more likely an internship program if the farm accommodates a worker’s formal academic commitments, such as offering the intern position in the summer when school’s not in session. Similarly, it’s best if the farmer allows the worker to return to school in August or September, even though this might be the height of the farm’s harvest season.

5. The duration of the internship program is limited to the time when the intern receives the education or training provided.

Workers that work on the farm year-round or for multiple seasons are more likely employees and not non-employee interns. The most risk averse approach is for the farm to limit the duration of an internship program. The duration should provide just enough time for the intern to learn the set curriculum or learning objectives.

6. The tasks the intern performs provide significant educational benefit and they complement rather than displace the tasks of paid employees.

It likely doesn’t take 8 hours of picking carrots to learn how to pick carrots. Nor does it take 40 hours of weeding to learn how to weed! These sorts of tedious and time-consuming tasks would likely not be appropriate to assign to an intern under this factor. The intern should only perform work to the extent that she needs to learn the task at hand. Similarly, if the farm hires less employees because the intern performs tasks that a paid employee would ordinarily perform, it will look more like an employee than an intern. With that said, an unpaid intern can perform some tedious tasks, so long as the intern’s training is the number one priority.

7. The intern and the farmer both understand that the intern is not entitled to a paid job when the internship program ends.

The internship program must serve to set the intern up for a career in the industry; it cannot simply be a trial period, or training for future work on that farm. The best approach is to have the worker sign a statement at the get go explaining that there’s no guaranteed employment position on the farm once the internship position ends.

What Does This Mean For The Farmer Who Wants To Have Interns?

How does the farmer know if its internship program sufficiently meets these seven criteria of the “primary beneficiary test”? The reality is, there’s no absolute certainty. The primary beneficiary test is a flexible test. Not all seven criteria need to be met and no single criteria is determinative. Whether an intern is an employee depends on the unique circumstances of each situation.

These strategies feel uncertain, right? There is an alternative worth mentioning: Farmers can choose to follow all employment laws for their internship program. Then the question of whether the intern is eligible to be treated as a nonemployee is insignificant. The single best risk management strategy is to simply know and follow all employment laws for every intern.

Treating interns like employees isn’t going to work for some farms. Farms wanting a non-employment intern program should become familiar with the seven criteria in the US DOL’s “primary beneficiary test.” They can then make a personal decision. The appropriate approach to a non-employment intern program depends on the farmer’s level of risk aversion.

Farmers willing to accept risk may choose to follow the seven criteria of the “primary beneficiary test” the best they can. This is still not an easy standard to meet. Fundamentally, education is an important part of any non-employment intern program, the structure of the position matters. Farms that accommodate a worker’s formal academic commitments, such as offering the intern position in the summer when school’s not in session, providing structured training with set curricula and learning objectives, tying the internship to an academic institution, and offering a limited term position will have an easier time arguing that the intern is not an employee.

What about farmers who can’t sufficiently meet the US DOL’s “primary beneficiary test”?

Farmers like Amanda who can’t or don’t want to meet the “primary beneficiary test” for non-employee interns have “employees.” They can still call their workers “interns” but they must treat them as employees when it comes to legal requirements. They must follow all applicable state and federal employment laws. To get started, see Section 3. (While it’s unlikely, farmers could check if their “interns” meet the legal criteria of independent contractors, which allows more flexibility than employment. See Section 1 on Classifying Workers on Connecticut Farms)

What about farmers who meet the DOL’s primary beneficiary test?

Farmer Ralph is delighted! He’s already working in partnership with a college and is certain he can arrange academic credit for his interns. His retirement provides the money he needs to make a living. His mission is to help young aspiring farmers and he’s willing to dedicate his time and energy toward training his interns so they can start their own farms. He doesn’t care whether his farmers’ market or restaurant sales are low. He simply wants to provide his interns with diverse experiences in a variety of market channels. He feels strongly that he meets the DOL’s test. Either way, he was thinking about starting a non-profit that is exclusively dedicated to education.

Farmers like Ralph who emphasize the educational component of the internship program and have established ties with academic institutions most likely have legally sound non-employee “interns.”

While it may not be necessary for these farmers to follow employment laws for their interns, these farmers must take special steps to keep detailed records of the internship arrangement. Primarily, this will help them run a more efficient and effective internship program. In addition, the paperwork leaves a trail of proof of the intern program’s legitimacy should an enforcement action ever happen. The following provides some examples of documents and records that
should be maintained.

□ Keep records of hours worked, tasks performed, and training curriculum utilized for the internship program

One way to do this is to have the intern keep a log book that the farm then retains or copies at the end of the season. This log book could also provide a way to monitor the intern’s progress throughout the program. Either way, these records should be accurate and kept on file for at least 3 years.

□ File reports and paperwork with affiliated schools or institutions that are providing course credit

Verification of an academic connection will help support the farm’s case that the internship emphasized the structured, classroom style education that the US DOL’s “primary beneficiary test” highlights. The intern might appreciate this attention as it may help the intern get the academic credit they need.

□ Have the intern sign an agreement acknowledging they’re a nonemployee intern

Getting the details of the arrangement in writing, including the fact the position is not employment, ensures that the farmer and the intern have shared expectations. Having a shared understanding helps foster good relations throughout the internship, which is undoubtedly a good thing. In addition, having the intern acknowledge key aspects of the arrangement in writing, including that the intern is not entitled to compensation and there’s no guaranteed position once the internship ends, are criteria in the US DOL’s “primary beneficiary test.”

□ Get insurance coverage for worker injuries

Even though farmers in Connecticut are not legally required to carry workers’ compensation for non-employee interns, it’s highly recommended that the farm carry insurance to cover injuries for all workers. Farming is dangerous and accidents happen. With no insurance, the farmer is subject to huge legal liability and financial risk should an intern get hurt. The best option in Connecticut is for the farmer to simply carry workers’ compensation for interns just as it is required to do for all employees. Another option could be to look into a commercial general liability plan that would cover the intern.

For more information on available workers’ compensation exemptions in Connecticut, read through Section 3 of this guide. For more general information on insurance coverage, see Farm Commons resource—Managing the Sustainable Farm’s Risks with Insurance: Navigating Common Options.

What about other options?

Amanda is feeling disappointed so she has a couple of other creative questions

Amanda has a nice idea in theory, but it doesn’t work in reality. If the law says a work position is employment, it’s employment, regardless of any agreement between worker and employer. By law, a worker cannot waive their right to minimum wage or other employment law protections. Unlike other areas of law, employment law is simply nonnegotiable. This is because of the overarching policy reasons behind employment laws, including the prevention of coercion and oppression in the workplace.

In Connecticut, farmers must generally pay all employees the Connecticut minimum wage. See Section 3 for more details.

Generally speaking, the same rules for interns apply to apprentices, or any other title a farmer might assign to a person for whom they do not want to follow employment law obligations. There is a different legal framework for an apprentice, but it doesn’t help much. More often than not apprentices are also considered “employees” in the eyes of the law, and therefore the basic employment laws need to be followed.

There is one exception to the minimum wage requirement specific to apprentices. If market conditions are such that work opportunities will be expanded for a specific trade by paying less than minimum wage, apprenticeship programs do not need to comply with minimum wage requirements. But this is a well orchestrated arrangement, often through trade schools or community colleges. The program first needs to prove the market conditions, including projections of increased opportunities resulting from apprenticeship programs. They’ll also need to get government approval. For more information on registered apprenticeship programs in Connecticut, contact the Connecticut Department of Labor Office of Apprenticeship Training.

Yes. The bottom line is that regardless of what you call the workers, the farmers should assume they are employees unless the farm’s internship program sufficiently meets the US DOL’s “primary beneficiary test.”