Internships - What Your Company Needs to Know

Thinking about bringing on unpaid interns to join your company?  Be careful! The Department of Labor has strict rules regarding the conditions required for an intern to qualify to work without pay.  Generally, the activities and training completed by the intern must be solely for his or her own benefit, and the company may not derive any immediate advantage from the intern’s activities.  In addition, you may not hire unpaid interns to do work that would normally have been done by another paid employee.

If you do bring on an unpaid intern, you must adhere to the following rules:

  • Training received by the intern must be for his or her benefit.
  • Training must be general, not for the immediate advantage of the business, and it may even slow normal operations.
  • Interns can’t be used to replace paid employees.
  • Interns must be closely supervised or mentored.
  • Interns can do real work as long as they are closely supervised, are learning and aren’t necessarily creating a final product.
  • Both the intern and the business must agree that the internship will be unpaid.
  • Both parties must agree that no job is promised at the end of the internship.
  • High schools, technical schools and colleges can partner with businesses to set up compliant unpaid internships in which the student receives course credit. This lends credibility to the internship’s benefit for the student.

Make sure that you have a thorough written plan outlining the activities and training the intern will receive throughout the course of the internship, as well as the expected learning goals.  Be sure to offer internships in writing, with a full outline of internship activities, goals and conditions.

It’s advisable to consult with legal counsel when developing a formal internship program to ensure that the company is not creating liability by bringing on unpaid interns.

If an intern fails to meet all of the DOL’s criteria, they should be paid at least minimum wage and any appropriate overtime as employees. When in doubt, businesses can avoid legal problems by paying interns at least minimum wage.