Should Interns Be Paid?

May 15, 2015

With summer quickly approaching, college students are looking for internships to gain experience and learn from hands-on training in a particular field. Many internships are unpaid, but not all internships should be.

The Fair Labor Standards Act places restrictions on unpaid internships. There are six factors which determine the eligibility of hiring interns without pay. If the position meets all six factors, they can offer an unpaid internship. 

Six Determining Factors:

1. The training is similar to an educational environment.

2. The internship is for the intern’s benefit.

3. The intern does not displace a regular employee.

4. There is no immediate advantage to the company.

5. There is no expectation of future employment.

6. The intern understands that the internship is unpaid.

If the position doesn’t meet all six factors, then legally you need to pay at least minimum wage. If the position meets all six factors, then you can offer an unpaid internship, but it’s recommended you give a stipend for gas, food, etc.

Keep these six factors in mind when hiring unpaid interns. Not meeting the criteria could result in a lawsuit or owing back wages to the intern, costing you more money in the long run. Additionally, if the intern is doing the work of a regular staffer, the intern must be paid.

Take the time now to reevaluate your intern positions and see if they qualify as an unpaid internship or if you need your interns on the payroll. This might save you money if you’re not meeting the standards required by law when hiring interns.

We want to bring your attention to situations that could possibly affect your bottom line so you can take the necessary precautions to avoid finding your company in legal trouble or having to pay more to rectify the situation.

This information was provided by CFOandControllerAlert.com and Glatt et al. v. Fox Searchlight Pictures, Inc. For more information, contact WPMA‘s Philip Bibeau at 978-874-5445.

 

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