An internship is an opportunity that can lead to a full-time job. College students may receive class credits for internships. You might want to use internship programs to scout new talent and get temporary help without committing to permanent new hires.
But don’t use interns as free or low-cost labor. If you’re considering interns as potential hires, you need to know that federal labor laws require payment in most circumstances. This doesn’t mean that there are no unpaid interns, but they’re not common legally. State laws may apply as well. The Fair Labor Standards Act governs how interns are to be compensated:
- Interns who work at for-profit firms must be paid at least the minimum wage and any applicable overtime.
- Paid interns are temporary employees and are treated like regular employees as far as labor laws are concerned.
- When interns are substitutes for regular workers or provide a needed boost to your company, they must be paid at least a minimum wage and any overtime.
You may legally hire an unpaid intern if you can show the intern is the “primary beneficiary” of the relationship. What does this mean?
- The intern understands that he or she will not receive compensation and doesn’t expect compensation.
- The internship is training received in an educational environment. If the intern is receiving job-shadowing opportunities without performing more than a minimum of work, the relationship is more likely to be viewed as an unpaid internship.
- The intern will receive academic credit — it’s part of his or her coursework.
- The intern is not displacing a regular employee.
- The internship aligns with the intern’s academic calendar so the intern can meet other academic commitments.
- Both parties understand there’s no guarantee of a job when the internship is over.
- The intern is provided skills that can be applied to other employment settings.
- Your business isn’t dependent on that individual’s work product.
You should make clear what the duration of the internship is from the beginning. Avoid making any promises of a permanent position, and don’t call it a trial period.
If you register with the U.S. Department of Labor, you may pay individuals who are at least 16 years of age 75% of the applicable minimum wage. These student learners must receive instruction in an accredited school, college or university and work on a part-time basis. To apply for authorization, fill out Form WH-205 and send it to the Wage and Hour Division of the U.S. Department of Labor.
Among best practices:
- Provide interns with real work assignments.
- Hold orientations for managers, mentors and students so everyone starts with the same expectations and role definitions.
- Provide interns with a company handbook or website to serve as a guide, answering frequently asked questions and communicating the rules.
- Provide housing and relocation assistance if finding affordable, short-term housing is daunting.
- Offer scholarships, especially to attract students with specific skills.
- Offer flex-time or unusual work arrangements to help students transition from school to work.
- Invite career center staff to your facility to visit interns on site.
- Conduct exit interviews either face-to-face or by phone to assess interest and feedback.
Make sure you are complying with the legal requirements for interns because employers who violate the law can face stiff penalties. Consult with qualified professionals to ensure your interns are within the law.