In the last
few years companies have looked for ways to maximize their employees in a cost
effective manner. Why not hire interns to work for free? While it seems like a no-brainer, having an
intern is more complicated than many employers understand. Not just any
for-profit company can legally have unpaid interns. Legal criteria exist to
protect interns from being “grunt workers” for free.
There are
several things to think about before you start advertising for interns. The basic premise of an internship is that it
is real world, hands-on, job training that cannot be achieved in a classroom
environment. The first question an employer should ask is, “am I prepared to
offer an educational training experience?” Doing so takes manpower, planning,
and often actually takes away from work production. In reality, the sole
purpose of an internship is training and education.
The
Department of Labor (DOL) has set guidelines for the hiring of unpaid interns.
The following six criteria must be met:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training that 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.
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
The DOL states
that all six must be met, but the courts have been more liberal with their
interpretation. Historically they look at the internship as a whole. What seems
to weigh most heavily is when an educational institution is involved, and
credits are given in return for a student’s participation in an internship.
It is
important to develop a detailed plan for the company’s internships. The
following are points that need to be considered and planned for:
- Compensation—If all six criteria are not met should you be paying minimum wage?
- Workspace—Is there a physical space for the intern to work?
- Manager—Who will oversee the internship?
- Trainer—Who will provide the required training and education that the internship requires?
- Training and Experience—What will the actual training entail and what is the work experience you are willing to provide?
- Tasks—What will the intern actually do?
- Expectations—What are realistic expectations for the intern and the company?
Once these
key points have been addressed and a plan has been made, it is very important
to review it with your attorney. This will avoid any problems popping up once
an intern starts, especially in the area of compensation. Other important
points to discuss with your attorney concerning internships include
unemployment compensation, international students and internships, non-compete
agreements, worker’s compensation, non-disclosure agreements, and
discrimination.
Having an
internship program is not just about having free labor. It is a way to give
back to the community, local universities and your chosen field, as well as helping
students gain real world experience. Understanding the legal aspects of
internships is the first step in starting a successful program at your company.
Sources:
Fact Sheet #71: Internship Programs Under the Fair Labor
Standards Act. (April 2010).Department of
Labor. (retrieved January 29, 2013) http://www.dol.gov/whd/regs/compliance/whdfs71.pdf
Hlavac, Esq, George C. and Edward J. Easterly, Esq.
(February 2010) Legal Q & A. IUPUI. (retrieved January 29, 2013). http://www.iupui.edu/~solctr/wp-content/uploads/2010/12/Legal-Issues-2010.pdf
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