Unpaid internships are common, but are they legal?

Source: fdlreporter

Written by: Katie Loehrke

More than 1 million Americans a year work as interns. Some occur just during summer months, others are more open-ended.

Surveys show that approximately one-half of all interns are unpaid. Do you and your company know the rules on whether or not an internship requires paid compensation?

Know the rules

In today’s economy, college students may be watching many of their peers graduate and look around furiously for jobs that aren’t abundant. As a result, more eager graduates and students may be interested in working as interns for your company, especially as summer rolls around.

In exchange for a leg up in the job market, they might be willing to do any work, for any number of hours, for any kind of pay — or for no pay at all.

But should you let them?

Regardless of whether or not they’re willing to work for free, interns whose work benefits your organization must be paid at least minimum wage for the time they put in. That is spelled out in the Fair Labor Standards Act enforced by the U.S. Department of Labor.

In order to be unpaid, an intern must receive training from your organization that benefits the student and is similar to what he or she would find in a vocational school. However, that training cannot advance your company’s interests.

For instance, you might help an intern develop skills to sort and route mail at your company, but if the individual is performing the tasks that a regular employee would normally perform, the intern must be paid. While an unpaid intern could work with another employee to learn a process, the intern may not actually perform the employee’s job.

The standard to be unpaid is really quite high. In addition to not benefiting from an unpaid intern’s work, the company might actually have normal business operations hampered by the intern’s presence.

When an unpaid intern’s work does not benefit the company, the intern must understand that he or she is not entitled to wages and can’t be guaranteed a job at the end of the internship. If the employee was entitled to a job, the training would be considered a benefit to the company and the internship could not be unpaid.

Not free, but still valuable

While it’s possible for a company to legally have an unpaid intern, it’s not likely. That doesn’t mean interns can’t be beneficial. Savvy businesses can still use interns as extra help at a low cost and internships offer a chance to get to know an individual.

While the hourly cost of interns can be small, remember that their contributions to your company don’t have to be. Instead of assigning menial tasks to interns and keeping them separate from “real” employees, give them actual work with challenges and opportunities for problem solving.

Regular employees crave a sense of belonging and appreciation in addition to opportunities to grow and be challenged on a daily basis. Interns are no different. Treating them like other employees gives them a true taste of a career with your company.

Even though you’ll probably need to pay them for their work as interns, guiding them now could translate into an investment in your company’s future.

*Katie Loehrke is a human resources subject matter expert and editor with J. J. Keller & Associates, Inc., a nationally recognized compliance resource firm.


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