Hiring interns at your company is an effective way to provide work experience for students and to scope for potential job candidates.
But if your internships are unpaid, you could be violating the Fair Labor Standards Act, which establishes minimum wage and overtime standards. You also risk legal action from current or former interns, seeking compensation they did not earn while interning.
To determine whether it is permissible for your company to hire unpaid interns, use these criteria from the Department of Labor:
- The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an education 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.
Save yourself from any potential legal trouble by evaluating your internship program and determining whether or not your interns should be paid.