View All | June 2019 Newsletter Edition

Internships can be the ultimate “win-win” of employment. The intern wins by getting valuable work experience and training, and you win by getting a curious and dedicated worker who could return to your workforce down the road ready to hit the ground running.

One thing interns aren’t is a source of free (or low cost) labor, except under certain circumstances. Instances of abuse of unpaid internships by some employers, in which interns weren’t given meaningful opportunities to gain useful experiences, have changed the rules. Those instances resulted in the imposition of guidelines that you’ll need to follow if you want to provide an unpaid internship.

Paid or Unpaid?

According to the U.S. Department of Labor, the courts apply the “primary beneficiary test” — which is part of the Fair Labor Standards Act — to determine when an intern should be given the same rights as a regular employee. In a nutshell, if you benefit from the internship more than the intern does, then you need to pay him or her. That’s a subjective assessment, but there are seven tests to help you get it right.

The tests are, the extent to which:

  1. It was clearly understood by both parties that there would be no compensation.
  2. Training is given to the intern similar to what would be provided in a purely educational environment.
  3. The internship is linked to, and integrated with, the intern’s formal education program.
  4. The employer accommodates the intern’s academic commitments.
  5. The internship’s duration is for a fixed period.
  6. The work performed by the intern complements, rather than displaces, work performed by paid employees.
  7. It’s understood that the employer isn’t committing to hire the intern after the completion of the internship.

Chances are, you don’t want to jump through all those hoops to have an unpaid intern. Plus, the number of prospective interns who can afford to work without pay is generally small. Interns don’t expect premium wages, so unless you’re under acute financial strain you’re probably better off paying the intern, and should pay more than minimum wage.

Compensation Caveats

There are other compensation-related issues to keep in mind. For example, if you’re subject to the Affordable Care Act’s “employer mandate,” employees who work at least 30 hours a week generally must be offered health benefits (after a maximum of a 90-day wait). Also, assuming your intern would be classified as nonexempt (which is a safe bet), remember that employee-interns are entitled to overtime pay when they work more than 40 hours a week.

After you’ve come to terms with those factors, what can you do to make the internship a true win-win? Here are some basic steps.

First, identify a current or anticipated future talent gap in your workforce — particularly involving a skill that an intern might already be developing in school. Maybe it’s social-media-based marketing, graphic design or an advanced engineering field. Seek input from your department heads to find out what their needs are.

Next, turn to nearby educational institutions that train students in the fields that match your needs and contact their career development offices. Research other internship opportunities that students are exposed to and learn how they’re structured.

Then, think about how you want to structure the position. What will the intern’s specific duties be that will make the position of interest to him or her, as well as useful to you? You can give the intern some busy work, such as filing, but keep it limited.

Proper Supervision

For tasks that require greater skill, determine who on your staff will provide oversight. Estimate the time that will be required of the supervisor, and if necessary, adjust that person’s job duties to free up time that can be dedicated to the intern.

Next, write the internship job description, perhaps with help from people in the department where the intern will work. Be sure to note the duration of the internship. As you proceed, explain your plan for the internship and get buy-in from that department so those employees see it in a positive light, and don’t consider it a threat to their own job security. Find a mentor for the intern, or fill the role yourself, if possible. Remember, mentors can learn from interns too, whether it might be new technical skills or how a fresh perspective perceives your operation, both the good and the not-so-good.

After completing the job description write-up, read it from an intern’s perspective. Does it sound as though it’s a great opportunity? Is it structured to provide some formal training and feedback? You could also get the opinion of the internship coordinator at the educational institutions where you’ll be seeking new talent.

With your polished job description in hand, you’re ready to begin your intern talent search. And once you’ve made your hire, always remember that the intern is … an intern, not a seasoned employee. As such, the individual might make mistakes that would shock you if done by a regular employee. Be patient. But regardless of their status, interns must understand that they can be terminated for the same reasons as members of your permanent staff — reasons spelled out in the applicable provisions of your employee handbook.

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