As the summer approaches, you may be considering using interns within your organization. Interns are not only an inexpensive source of labor, but they can provide valuable insights or bring new ideas to your company. It is estimated that 15%-20% of companies use interns on a regular basis. [1]
Most Interns Must Be Paid
Did you know, however, that most internships must be paid? Internships have recently become a focus of audits for the U.S. Department of Labor. The DOL has issued a fact sheet on internships describing the criteria which must be met for it to be unpaid. An internship can be unpaid only if it is training solely for the educational benefit of the intern.
The determination of whether an internship or training program meets this narrow exception depends upon all of the facts and circumstances of each situation. Below are the criteria which must be applied when making the determination as to whether an internship is for the educational benefit of the intern:
- 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;
- The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Companies are still free to have interns, but if the internship does not meet these criteria, the intern must be paid at least minimum wage. If you are considering utilizing interns in your company, please contact an HR Consultant today to assist you with the process.
[1] Financial Planning Association Survey 2006
Source: EPLI Pro News, May 2010