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More than 1 million Americans a year work as interns, and surveys show one-half of those internships are unpaid. There are several ways for your company to know the rules on whether or not an internship requires paid compensation.

Interns whose work benefits your organization or company must be paid at least minimum wage for the time they put in.

This is enforced by the U.S. Department of Labor and written out in the Fair Labor Standards Act.

Graduates and postgraduates are willing to get a leg-up by working as interns, especially when summer comes around. They may be willing to work for any number of hours, do any time of job for any amount of pay, some even for no pay at all. But how do you know if you should pay them? Whether they’re willing to be paid or not isn’t the question, is it legal?

  • For an intern to be unpaid they must receive training from your company or organization that is beneficial for the student, and is similar to the training they’d receive in a vocational school. BUT- That training cannot benefit your company or help advance your company’s interests.
  • The intern can learn skills such as how to sort and route mail, but if they perform tasks that regular employees would perform, the intern must be paid a compensation as little as minimum wage.
  • An unpaid intern could work alongside another employee to learn a process, but the intern may not actually perform the employee’s tasks.

The standard of unpaid internships are quite high, in addition to not benefiting from the unpaid intern’s work, the company might actually have normal business operations hampered by the intern’s presence.

The intern must know they are not entitled to wages, nor are they guaranteed a job at the end of the internship. If they are entitled to a job after the internship, the training he or she received would be a benefit to the company or organization and the internship must be paid.

Savvy business can use interns as extra help at a low cost to have the chance to get to know the individual for a particular period of time. The hourly cost can be small, their contributions to the company don’t have to be. Give interns tasks that are complete with challenges and opportunities for problem solving instead low-status assignments. Regular employees crave a sense of belonging and appreciation, as do interns. Even if you need to pay your interns, they may become a good investment to your company in the future.

If you’re planning to hire interns this summer, paid or unpaid, make sure to know the rules behind internships.

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