To pay or not to pay interns?
It’s a common question among businesses who lean on us for HR – and one we hear most often in spring and summer, when students are on break with more time to commit to work experience.
It’s a common question for another reason, too: Legislation on this matter changed somewhat recently. In 2018, the Department of Labor (DOL) swapped its 2010 DOL Rule – their previous standards for determining between paid employees and unpaid interns – for a less rigid seven-factor “primary beneficiary” test, which focuses less on a role’s mechanics, and more squarely on who benefits most from the arrangement: The employer, or the worker? If the worker primarily benefits, said worker can be classified as an intern, and does not need to be paid. If the employer primarily benefits, said worker must be classified as an employee, and must be paid minimum wage and overtime under the Fair Labor Standards Act. You can find the Department of Labor’s seven standards here.
If you review these standards and still aren’t sure whether your student worker should be classified as an unpaid intern or paid employee, we strongly advise erring on the side of caution, ie. paying them. Misclassification can be costly – often costlier than a few months of compensation.
BUT DON’T STOP THERE
Misclassification prevention isn’t the only reason to pay student talent even if you don’t have to. At myHR Partner, we encourage employers to consider this matter through an added lens: The end goal.
Do you want your interns to be excited and focused? Not worried about paying for gas money to get there? Not tired from juggling their internship with a paying job?
Furthermore, have you or your business formally or informally committed to equal opportunity? To doing your part to help balance social scales by supporting the likes of first-generation college students, non-traditional students, or even traditional students who might be facing high rates of student loan debt?
If you answered yes to one or more of these questions, paying your interns – even if not required by the DOL – is something we strongly encourage you to consider.
MORE FOOD FOR THOUGHT
Conversations about student worker compensation segue nicely into another area we encourage businesses to examine, whether or not students are unpaid interns or paid employees:
Expectations and structure.
In your workplace, are student workers’/interns’ responsibilities commensurate to their experience? Bringing students onboard should be a win-win for them and for your business. This typically requires effort on the employer’s part to properly train them and outline expectations beyond what you would need to do for more seasoned hires. Remember, this is a critical chapter in a student’s career journey. Are you setting them up to succeed? To grow professionally?
Looking at it through another angle, is your business putting itself at risk by tasking students with responsibilities beyond what they can be expected to perform? We recently heard about a business using unpaid summer interns to cold call highly qualified prospects. This is not something we’d encourage any business to do casually.
If you bring students in house – paid or unpaid – creating a well-considered internship program is only fair to both student talent and your larger workforce, as it will ensure answers to key questions like these ones. Not sure where to start? Turn to myHR Partner. We can work with you to develop a right-fit internship program and – better yet – can oversee the student talent within it. Reach out today.
