Do You Know The Rules On Paid and Unpaid Internships?

“I’m looking for an intern because I just lost a critical employee.”

“We believe interns should be ready to contribute on the first day of their internship!”

“Our interns work as long as they’d like!”

If any of these three statements reflect your paid or unpaid internship experience, I hate to break it to you but you’re doing it wrong. Students who agree to join your organization shouldn’t be evaluated the same way as an entry-level employee because the rules of engagement aren’t the same. A quick rule of thumb is that employees are hired to SHOW and interns are groomed to GROW. If you’re in the middle of the hiring process for your summer interns and think you might be going about it wrong, we’ve got you covered!

This article will explain:

  • The merits of paid and unpaid internships
  • The seven factors that the Federal Government uses to validate an internship program
  • What to do if you’re stuck or confused

 

Are Internships Still Worth It?

If you’re a hiring manager at your organization, you’re probably wondering if internships still matter. In an era of AI and bots, lean teams and freelancers; the idea of hiring an intern might feel like an afterthought. Not only do interns legally require more hand-holding than other labor classes, but turnover is darn-near 100% since unlike Mike in Accounting who’s been at your company since the pre-Internet age, internships have to end at some point! In my professional opinion, internships are worth it for employers and interns alike! My thoughts on the subject are below but I’d love to hear your thoughts in the comments section or by tweeting me on Twitter (@joeyvpriceHR).

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If you’ve ever looked at entry-level job descriptions (or written one lately), you know the conundrum that early-stage employees face. Many “entry-level” jobs require at least 1 or 2 years of experience in the industry… But how does one get this experience without having experience? Well, a perfect way is through an internship. Whether a student has a paid or unpaid internship, there’s redeeming value for the student who makes the most of their time at work. Yes, unpaid internships continue to be a hot topic on college campuses but they do pay off. Unpaid internships offer a whole host of opportunities for students who make the most of their limited time on your team:

  • Valuable work experience
  • Opportunities to network with industry professionals
  • A chance at reducing college tuition debt

Internships also benefit employers in many ways. They offer employers a way to begin building a pipeline of future talent, increase brand recognition among early-stage professionals, and may provide skilled labor at a discounted cost to help support mission-critical tasks. However, internships also come with a degree of risk, and an unsuspecting employer may find themselves under scrutiny or facing legal penalties and fines if their internship programs do not measure up to Federal, State, and local guidelines.

What Mistakes Do Employers Make When Hiring Interns?

Perhaps the biggest issue that arises when providing internships is whether the experience actually constitutes an internship, or if it is considered to be employment. Remember, internships are meant to be an educational experience first and foremost. Thankfully, there is Federal guidance on what makes a good internship program! The following criteria and tests can be used when determining whether or not your internship program is truly an internship:

  1. Both the intern and the employer understand that the intern is not entitled to compensation

Make it clear to your interns from the very start that they will not be paid for their efforts as an intern. Try to capture this in writing either when you offer the internship to the student, or in the original announcement to which the intern applies.

  1. The internship provides training that would be given in an educational setting.

Say goodbye to the days of making your interns take everyday coffee runs, lunch orders, and other menial tasks. The work that an intern is asked to complete should be similar to that of what they would otherwise do or learn in the classroom (business majors should learn about business functions and processes, political science majors should gain an understanding of the political process, etc.)

  1. Completing the internship entitles the intern to academic credit

So, if the intern isn’t getting paid in money, what should they be paid in? Why, academic credit of course. Work with academic institutions’ internship coordinators to coordinate how many hours an internship will be expected to work, and how many credit hours the intern may be expected to receive.

  1. The internship is limited in duration and educates the intern

Put a time limit on how long the intern will be expected to work for your company. This helps in setting expectations for your interns, as well as in determining the number of credits your interns will receive for their experience. How long should an intern last, you might ask….?

  1. The internship corresponds with the academic calendar.

Depending on the State, college, or academic program, this length might differ. However, make sure that the internship corresponds as closely as possible to the academic calendars of the colleges in which your interns are enrolled.

  1. The work complements, rather than displaces the work of a paid employee

Plain and simple, your interns should not replace your regular workers. Doing so almost universally results in your interns being considered regular, paid employees. Not to mention, it is also unethical and, if your interns continue not to be paid, could result in stiff fines for your company.

  1. The intern is not entitled or promised a paid job at the end of the internship.

Promising an intern a job doing essentially the same things they’ve been doing as an intern causes problems. Mainly, it essentially creates an “unpaid trial service period” to test out employees until they become regular employees. A documented or promised job at the end of the internship also can be seen as creating an employment relationship.

By no means does this list preclude you from paying your interns for the work they do for your company. In fact, you may need to pay your interns in order to be competitive and attract top college talent to intern for your organization. However, it is important to keep the above 7 factors in mind, regardless of whether your interns are paid or unpaid.

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Do You Want to Build The Perfect Internship Experience?

If you’ve gotten this far in the post, pat yourself on the back! It shows that you’re committed to helping your workplace be a launching point for successful students who benefit from mentorship at your office.  If you’re interested in building out your internship program – or refining it – contact us today! It never hurts to have a second set of professional eyes reviewing your program to make sure it’s perfect. Jumpstart:HR, LLC can assess your internship program for the following:

  • Does your internship program pass the seven-step test?
  • Is your internship program one that students want to sign up for?
  • How do you make the most of the time your interns have with you?
  • How do you attract interns that resonate with your brand/mission/values?
  • What do I need to know/do if an intern doesn’t quite work out and needs to be terminated?

These are all big questions that we talk for small businesses and small teams at larger institutions. Drop us a note and let’s chat!

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