The U.S. Supreme Court has held that the words "to suffer or permit to work," as used in the Fair Labor Standards Act (FLSA) to define "employ," do not make all workers employees. For example, workers who work for their own advantage on the premises of another without any express or implied compensation agreement are not employees under the FLSA.

Whether trainees or students are employees of an employer under the FLSA will depend upon all of the circumstances surrounding their activities on the premises of the employer. If all of the following criteria apply, the trainees or students are not employees within the meaning of the FLSA:

• The training, even though it includes actual operation of the facilities of the employer, 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 close supervision;

• The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his operations may even be impeded;

• The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and

• The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

In Hawaii, as in all states, the Fair Labor Standards Act (FLSA) is a federal law that sets standards for wages, overtime pay, and youth employment. The U.S. Supreme Court has clarified that not all workers are considered employees under the FLSA. Specifically, the Court has indicated that the phrase 'to suffer or permit to work' does not extend employee status to individuals who work for their own benefit without a compensation agreement. When it comes to trainees or students, their status as employees under the FLSA is determined by the totality of the circumstances of their activities with the employer. In Hawaii, if trainees or students meet all the criteria outlined by the FLSA—such as receiving training similar to a vocational school, the training being for their benefit, not displacing regular employees, the employer not gaining immediate advantage from their activities, no guarantee of a job post-training, and a mutual understanding that there is no entitlement to wages—then they are not considered employees under the FLSA. This means they are not subject to the minimum wage and overtime protections that the Act provides to employees.