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An Independent Contractor job labeled as "Internship"?

Internship vs Independent Contractor vs Part-Time EmployeeI need to explain this so people can understand. Within one (county government) company, they like to hire "peer support specialists". They hire them since they have "lived experience" with a mental health issue and the state of California ruled into law (2004) The Mental Health Services Act to change public mental health services. Okay, so within this county there is some type of service agreement between "The County MHD" and "Other company". The people are trained for 2 weeks (80 hours) to follow "other company's" book on peer support. The people that are training is "The County MHD". After this 80 hours of training it is offered to the "peers" to start an "internship". But this is not your ordinary internship where someone is going to school and they need to say complete a set number of hours. This "peer Internship" is set up to look right. (At least in my eyes it is). The "County" doesn't pay the "Intern". Instead, another service agreement is set up where the "peer intern" is paid only $80 a week (while working 20 hours a week) and the "Other company" is paying the "peer intern" via w-9/1099. I only took two classes in Human Resources while earning my MBA. None of which was payroll or going into IRS rules. But I have read online that a company can't treat employees like "independent Contractors" and to do so is - well - illegal. Within this set up, the "peer intern" reports to the department of mental health office that he agreed to work out of - for 20 hours each week - for 6 months. He uses the department of mental health's computers to do the job. He is directed on HOW to do the job by county employees. The "other company" is not even around. He will have to sign a w-9. This means (I believe) he will not be able to get any workman's compensation and must save about 20% (maybe 30%) of his income to pay all of the taxes. This comes to about $1,920 at the end of the 6 month period. The checks are from the "other company". That would be $384 - $576 that the "peer intern" would have to pay back since this is set up as an IC. But the peers don't know it! They think it is an "internship" (which the IRS doesn't even use that term). The "peer intern" must get a livescan (just like an employee), and must get a pee test (just like an employee does). Many times in internships I have seen two things. The person is not paid at all. Or the other - they are paid about $1K a month to "learn the trade". You can't live on $1K a month, but you can't do anything with $80 a week. If the peer interns were paid $8 an hour (Min wage) at 20 hours a week, it would be $160 a week - taxes (taken out by employer) and I think this would be sending a much more positive message to the "peer interns" . Saying 'you are one of us now". Is the county trying to pull the wool over the eyes of those "peers" with a mental health issue since they think they are stupid and can't see what is going on - or is it the other way around? The County just doesn't care and just wants to get out of paying the taxes and wants to get out of calling them "employees". Doesn't the County know that it behooves them to have the peer interns on "employee" status to protect the employer (independent contractors do not have Workman's Comp and IC's can file a law suit against the employer). What employer would want to do this? Lastly, sometimes the County does "hire" these "peer interns" (as employees) after they completed the 6 months. But they must go through another livescan and pee test to become "employees". I think this is set up to look like these people are interns. Sometimes the "peer intern" must wait 6 month to be "hired on as an employee". Shouldn't these "peer interns" be classified as "employees" ? What could be done about this? The reason I'm so involved - I am one of the one's getting an interview for the "peer internship". I didn't know Independent Contractors get interviews? I thought IC's just "got hired" since they are "trained" already. See what I mean?


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

While this really isn't the forum for this question.

1. Look at
1a. An internship must pay either minimum wage OR be associated with an accredited high school/college where credit is earned toward graduation.
2. Contact the US DOL and your State DOL
3. Contact an Attorney.
4, As a 1099 employee, minimum wage does not apply (but is the job really an IC job?) see:


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