Whether paid or unpaid, interns can be a great asset for employers. While the major goal for internships is for the intern to gain valuable career experience, companies can typically benefit from both the physical labor and constructive input that interns provide.
Even more, many interns often become full-time employees after serving for a season at the company and learning the ins and outs of a particular role or department. So, for employers to make the most of internships for both themselves and interns, it’s important to know the legal guidelines involved with paid and unpaid internship positions.
With a goal of learning, gaining experience, or even obtaining school credit, interns can often be the hardest-working employees with little to no compensation. But for paid internships, the U.S. Department of Labor has created regulations that help employers abide by proper compensation standards.
According to the Fair Labor Standards Act (FLSA), if a company’s internship role qualifies as a paid position, the intern must be paid (at least) the federal minimum wage for services provided within the “for-profit” or private sectors. Employers must also compensate interns for overtime, when applicable.
For in internship to qualify as unpaid, the U.S. Department of Labor has enacted six standards that employers must meet. First, the internship must involve similar training to that given in an educational environment. The internship experience must also be of benefit to the intern. An intern is not to take the place of regular employees but instead should work under close supervision of existing staff. A fourth standard is that an employer who provides training for an intern may not derive immediate advantage from the intern’s activities. There must also be an understanding that the intern is not necessarily entitled to a job at the conclusion of the internship. Finally, both the employer and the intern come to an understanding that the intern is not entitled to wages for the time spent in the internship.
While some of these standards could be considered broad or questionable, it’s important to consult with the U.S. Department of Labor’s Wage and Hour Division for further clarification or additional questions.
Ultimately, make the most of internship opportunities. Keep in mind that employers who provide interns with reasonable compensation, valuable feedback, exceptional career guidance, and the potential for future employment will not only be better positioned for success but will also maintain a solid reputation in the job seekers market.
Got questions regarding internships for your own company? LBMC Employment Partners is happy to help. Contact us today!