Tips for Hiring Unpaid Interns

BY: ON MONDAY, JUNE 09, 2014

Hiring unpaid interns has never seemed trickier. While the Department of Labor has established strict rules for unpaid internships (as opposed to paid internships, which are governed by different regulations), more and more lawsuits than ever are being filed against businesses that fail to comply with the law. As a result, it’s never been more important to ensure that, if your company hires unpaid interns, it does so legally.

The six factors to consider when hiring an unpaid intern are identified in the Department of Labor’s Wage and Hour Division Fact Sheet #71:

1.The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;

2.The internship experience is for the benefit of the intern;

3.The intern does not displace regular employees, but works under close supervision of existing staff;

4.The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;

5.The intern is not necessarily entitled to a job at the conclusion of the internship; and

6.The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Fulfilling these requirements will save you a lot of hassle down the road – and ensure your company provides a useful and worthwhile internship program. It’s not just the interns who benefit from well-run programs either. Businesses can gain a lot when they provide good training and teaching, and having a reputation as a good place to work is no small feat.

Providing a Legal Unpaid Internship

An Educational Environment

One of the most common complaints in unpaid internship lawsuits is that interns are basically treated as regular employees – except, of course, without pay or benefits. You simply cannot do this. The idea of an unpaid internship is simple: instead of payment, individuals receive training and experience. Teaching interns how to use specialized equipment, how to carry out industry-specific tasks, or even what best practices are in any given area are all ways of providing training. It’s a good idea to have one member of your staff dedicated to your unpaid intern program. This way, there’s less of a chance that unpaid interns will end up carrying out exclusively mundane or employee-level tasks.

Benefitting the Intern, Impeding the Employer

Unpaid interns – free labor, right? Wrong. If the work carried out by the intern only helps your company and doesn’t provide them any new skills or experience, you could be violating the Department of Labor’s guidelines. In fact, government regulations specify that a business offering an unpaid internship may actually be inconvenienced – and that’s good. Taking the time to train and teach an unpaid intern may take regular employees away from their tasks, but that’s a sign that your unpaid internship program is doing what it’s meant to do: help the intern, not your company.

Not a Regular Employee

Another common complaint in the recent lawsuits is that interns are replacing regular employees, doing the work that should have been done by a paid worker. You need to look at unpaid interns as additions to your staff. Your current employees should be able to manage the entire companies’ workload. If you need interns to get everything done, there’s a problem. Unpaid interns are not replacements for paid workers and, as the Department of Labor regulations specify, need to be supervised. This means you can’t just give them a task and leave them unattended until the end of the program. Instead, you may want to invite feedback, see where their interests lie, and tailor the work you give them to ensure they’re truly learning.

No Job – or Wage – Entitlement

This is an important point for both sides to understand. Unpaid interns can’t expect or demand a job when the internship ends, but employers can’t use unpaid internships as “trial periods” before hiring somebody they want. Unpaid internships are their own thing: they start and end with no requirements that the relationship becomes permanent. If, of course, you want to hire the intern afterwards, that’s up to you.

You also need to specify from the very beginning that unpaid internships are just that – unpaid. A written agreement signed by the company and the intern is the best way to make sure both parties understand each other’s expectations.

Image via Shutterstock

About the Author

Shanon Carson
Shanon J. Carson is the chair of Berger & Montague’s Employment Law Department and a member of the firm’s Employee Benefits/ERISA department.  Mr. Carson handles employment cases involving discrimination; overtime and wage and hour disputes; employer retaliation; and wrongful termination.
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