Workplace of Choice

Internships are a great way for employers to supplement their workforce while giving students an opportunity to gain valuable work experience.   Many organizations have built a summer internship program to be a regular part of their business and work with local schools and universities to obtain interns.  For others, with tight budgets and a crop of eager students, internships are a new endeavor.  Internships can be a great way to get some much needed help without spending a lot of dollars.  But, as with all good things, there are compliance issues around internships. 

The Department of Labor has created a Fact Sheet addressing how to pay an intern correctly.  According to a recent New York Times article titled The Unpaid Intern, Legal or Not, the Labor Department is cracking down on firms that do not pay interns correctly.  So, what do you need to know about hiring an intern?

The Department of Labor’s Fact Sheet outlines six criteria for determining whether an internship meets the training program requirements under the Fair Labor Standards Act, and would qualify as being unpaid.  If these requirements are met, the intern is not eligible for minimum wage or overtime.  On the other hand, interns in the “for profit” sector who qualify as employees, rather than trainees, typically must be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek.   Unpaid internships in the public sector and for non-profit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible.   

The real test is “what is the employment relationship?”  If an intern is filling in for someone, this would most likely be considered a relationship of employer and employee, and not an internship, because the intern is involved in the day to day operations and acting more as an employee of the company.  The employer would be required to pay at least minimum wage and overtime where applicable.  If the relationship is mostly structured around a classroom or academic experience as opposed to the employer’s actual operations, the internship will likely be viewed not as an employment relationship, but as a training relationship.  The more the internship gives the intern skills to use at multiple jobs and not just at one employer’s organization, the more likely it will be viewed as training.  Additionally, the internship should also be for a fixed amount of time, such as a semester or summer. 

Overall, there are many benefits to hiring interns.  The company can accomplish projects that may have been "on the back burner", interns offer fresh ideas and skills, and the company can build relationships with colleges in the area which will later help attract potential candidates for future openings at the company.  With the right set-up, an internship can be mutually beneficial to both the intern and the company and have a significant impact on both.  Tell us about some of your internship experiences.