Intern season is almost here. Should you pay them, or not?
In a few weeks’ time, the spring semester at most colleges and universities will be over, and students will begin the time-honored tradition of interning at businesses and organizations across the country. They will bring to our workforces their eagerness to learn, their boundless enthusiasm and their willingness to work hard in order to experience “the real world.” In some cases, they bring confusion as to whether or not they should be paid for their internships as well.
According to the magazine California Lawyer, an estimated 70 to 75 percent of students at four year colleges in America do at least one internship, many of which are unpaid. Unfortunately, the laws about unpaid internships are not always easy to interpret, and employers must be careful to ensure that they comply with both state and federal laws.
Make sure your internships are compliant
Start your internship program off on the right foot by making sure you have participants properly designated. When it comes to setting up unpaid internships, the U.S. Department of Labor (DOL) has outlined what it expects. The following six criteria must be applied when making this determination:
- 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;
- The internship experience is for the benefit of the intern;
- The intern does not displace regular employees, but works under close supervision of existing staff;
- 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;
- The intern is not necessarily entitled to a job at the conclusion of the internship; and
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Remember that that any housing or food stipends, or other forms of “pay”, should be clearly designated as unrelated to wages. Or, if there are wages being paid, that they meet at least the minimum wage requirements under the Fair Labor Standards Act (FLSA) and applicable state regulations.
“Paying interns minimum wage and overtime, if they work over 40 hours a week, can help you avoid running into a lot of the disputable compliance issues later on,” says Tina Hamilton, PHR, president of myHR Partner. “Plus, this will allow your interns to focus better on your company because they won’t be scrambling to work a ‘second job’ around the time they are with you in order to cover their expenses. And think of the better pool of students you will have to choose from if you offer compensation along with the chance to gain valuable work experience.”
HR issues got you stumped?
Paid or unpaid internships. Benefits and compliance. Performance and retention. Hiring and training. Human resources encompasses so much of what makes your business run smoothly, successfully and profitably. Contact today to discuss how myHR Partner’s HR Partnering Services can help your bottom line.