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You really should be careful here.
Many firms seek to convert interns to salaried positions in order to avoid paying overtime. The question of when interns become "exempt" suggests that drives the inquiry here. The Fair Labor Standards Act ("FLSA") gives you the answer . . . . sort of.
The answer is that whether an employee is exempt from the requirement that the employer pay overtime depends on the employees' duties. Under the FLSA, a salaried employee is only exempt from collecting overtime pay if that employee also performs certain specific kinds of duties. Some salaried employees, however, do not perform these duties and are thus still entitled to overtime pay even though they are technically "salaried". In that instance, overtime is calculated by dividing the base "salary" by 40 to give an hourly rate. That hourly rate becomes the basis for overtime pay calculations at time and half for everything over the base 40 hour week.
Generally speaking, whether an employee is exempt depends on whether that employee performs what are called "discretionary" functions. To qualify, an employee must be given the discretion to complete tasks which are not generally subject to review and modification by others. If you trust an intern to perform design work, write specifications, etc. and you issue that work to clients without it being subject to review and revision by senior staff, then the intern may be performing a discretionary function. In my opinion, few if any architectural interns will qualify.
There are many instances where large firms made a practice of paying all employees a salary - even those new from school. Most didn't pay overtime, and the few that did paid it at the base hourly rate instead of time and a half as the law required. In a few of those cases the firms were eventually subject to legal action and were required to pay back overtime pay. In addition, the FLSA includes a punitive component. An employer found to be violating the act by not paying appropriate overtime is required to pay an amount equal to double the amount that should have been paid but wasn't. Where a firm had that practice for a number of years and had a large number of employees, that sum could be staggering.
The best advice is to get competent legal advice from an attorney familiar with this area of the law in your locale as this question is governed by federal law, and not by a policy a firm may choose to develop, or by what other firms may or may not do.
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Frederick Butters FAIA, Esq.
Attorney
AIA Detroit
Southfield MI
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