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).
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:
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.
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.)
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.
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….?
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.
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.
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!
It can be expensive to fail at hiring a new employee in a small business or startup. In this video, Joey Price, of Jumpstart:HR, LLC gives you everything you need to know about low quality of hire and how to improve candidate experience and your employee onboarding results.
“I’m so burned out but how can I take a vacation without falling behind at work?”
Phone calls. Texts. Emails. Slack Messages. 24/7. The alerts never stop!
It has become entirely too easy to connect with work and extremely difficult to retreat for even a day or two of relaxation. The result of this twisted relationship with technology and work is less joy and more burnout. Wouldn’t you agree? I remember a time when I worried constantly about leaving my company for a few days to travel to Italy – for fear of the whole thing imploding and having to rebuild like the ruins in Rome! If you struggle with wanting to take a vacation from work but feel guilty about doing so – you’re not alone. A recent survey found that 54% of Americans fail to use all of their vacation days each year. In addition to that, big cities like DC, SF, and LA lead the way in this “vacation-less” lifestyle. No wonder we’re all stressed out!
Now is the time to seriously consider taking that vacation. Whether to improve mental health, connect with your family and friends on a deeper level, or to regain purpose and creativity at work, these are the reasons why you should say “Yes!” to PTO and not even think twice about it:
Vacations are good for your mental [and physical] health.
If I told you that perfect attendance at work might be a cause of that flu that knocked you out last month, would you believe me? Or – what about those 10 pounds you can’t seem to shake off in order to reach your goal weight? For better or for worse, constant work creates stress in our lives and the impact of that stress can be felt deeply on the molecular level. Here’s what Psychology Today says about the dangers of work-induced stress:
When you’re stressed out and tired, you are more likely to become ill, your arteries take a beating, and you’re more likely to have an accident. Your sleep will suffer, you won’t digest your food as well, and even the genetic material in the cells of your body may start to become altered in a bad way. Mentally, not only do you become more irritable, depressed, and anxious, but your memory will become worse and you’ll make poorer decisions. You’ll also be less fun to be with, causing you to become more isolated, lonely, and depressed.
Combat stress and build up your defenses by making vacation travel an integral part of your life!
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Vacations help you build deeper connections with the people who matter most to you.
Have you ever found yourself saying “gosh, I wish I spent more time with [Insert Employee Name] in Accounting more often!”? Probably not. But have you ever kicked yourself in the butt for not spending enough time with your spouse, your kids, or your friends who all get lost as we race to climb the ladder of workplace success? Probably! Vacation is a powerful way to connect with people you care about while building memories that can last a lifetime.
Don’t believe this is incredibly important? Here’s an exercise for you:
Step 1: Think about – and write down – your favorite memory from your last staff meeting.
Step 2: Think about – and write down – your favorite memory from a vacation you took as a child.
Step 3: Pause and think about which memory made you smile more… My guess is that it was the latter and not the former. And that warm feeling of joy that you got from your vaction memory? That’s actively elevating your mood and putting you in a better headspace!
When you retire, or change jobs, or sell your company (if you’re an entrepreneur) – you’re going to want to have people around you that enjoy being in your company. Don’t be that guy or girl who works so much that no one close to you really knows the real you!
Vacations help you “think outside the box” when it comes to creative approaches to tackling workplace issues.
Now, this might seem a bit counterproductive for me to encourage you to take a vacation if you want to become better at work – but it’s true. In a recent NBC News article, NYC-based Psychologist Dr. Kathryn Smerling says:
“By taking time off, you’ll find a renewed sense of purpose, more energy to carry out tasks and in general, an overall sense of happiness.”
The long and short of it all is that taking the time to step away from work just might be the very thing you need to help you step up at work! Who knows? You might meet someone in your field at the pool bar and chat about best practices. You could finally get the time to read that great self-help book you’ve been meaning to tackle but never found the time. Or, the quality of your time away might give you the time you needed to reflect on your life purpose and give you the push you need to really get into the driver’s seat of life!
Vacation is an incredibly powerful tool for both relaxation and career. It settles your spirit which helps combat work-induced stress and it gives you the time and space to build new memories with the people you love.
Take that vacation and fight work-related burnout as if your life depends on it because the reality is that it does.
The following post is originally shared on the website of Georgia Public Broadcasting. Jumpstart:HR CEO Joey Price lends his comments to the global conversation surrounding the #metoo movement and addressing sexual harassment at work.
“#MeToo is not only a movement about sexual harassment. As Rebecca Traister put it in The Cut, it’s a reckoning for the way we work, and a call to change the power dynamics leading to sexual abuse. We talk with people who dedicate, in different ways, their professional lives to understanding toxic work environments and how to dismantle them. Erica Clemmons is the Georgia State Director for 9 to 5; Marie Mitchell is a professor of management at the University of Georgia’s business school; and Joey Price is the CEO of Jumpstart:HR, a human resources consulting firm based in Baltimore.” – Source
If your business needs to re-evaluate it’s sexual harassment policy in 2018, contact us now.
You’ve heard the statistics about how hard it is to run a business these days but have you considered that neglecting startup Human Resources strategy issues are a major blind spot hurting small businesses across the country? If you talk to many Founders, the reality is that Human Resources is an afterthought and strategic HR is rarely discusses until a) the company is in serious trouble financially or b) a serious HR issue happens that might land the organization in court. Recently, Entrepreneur.com shared an infographic that chronicled why businesses fail, how many companies are started and closed every year, and how long most startups last (hint: 50% fail by year five). When we consider the amount of time, money, and momentum invested in starting and running a business, a 50% failure rate is not okay. I’ve met business owners who’ve dumped their 401k’s into a debt-ridden business and worse – entrepreneurs who’s home life has been wrecked due to the difficult rollercoaster ride of running a startup. Running a startup is a grueling grind and there’s no guarantee that you’ll be successful; but the one area that startups should try to invest in if they want to succeed is their strategic startup human resources operations.
Here are the five reasons why startups fail and my take on the HR adjustment that can fix or alleviate these challenges:
19% of small businesses fail because they are outcompeted.
The Strategic HR Fix: Small businesses that are outcompeted either need a) faster, smarter decision-making skills or b) talented and qualified people on board who can address business issues of the day and the future. The reality is that some small businesses hire with a collaborative mindset that gives unqualified people chances to do things they’re passionate about but not technically proficient in. I once had a $13million dollar software development client but the CTO had very little experience in modern technologies that were relevant in their field. The company was losing marketshare to competitors who did not offer the total package approach my client offered but instead they offered modern solutions that were easily upgradable and plugged in well with other tech systems in their customer’s organizations.
When you’re losing to competition you need intel and a plan. A strategic HR advisor can identify skills gaps within your organization and set growth goals for your people or suggest new hires that need to come in and breath life into your organization.
Key Takeaway: A strategic HR advisor can be the champion for creating a competitive learning environment which raises the quality of your team output.
23% of small businesses fail because they don’t have the right team.
The Strategic HR Fix: This one is pretty obvious – you need new players on your team – but the “why” behind having the wrong employees varies from small business to small business. In my experience, family businesses tend to struggle with this the most because sons, spouses, and siblings can be given preferential treatment when it comes to hiring and promotions – which means responsibility is being given to someone who hasn’t actually proven they can get the job done. Small businesses can also have a “family” atmosphere which means relationships are formed and it’s harder to make decisions based on a person’s ability to get their job done. Small businesses that ignore sound HR influences suffer from having team members they might love as people but hate from a productivity and results perspective.
When you don’t have the right team, it’s important to assess what’s working and what isn’t. A strategic HR advisor can identify who is making the greatest contributions to your organization and who are the bottlenecks.
Key Takeaway: A strategic HR advisor can be the neutral third party who makes recommendations based less on relationships and more about a small business’s strategic business goals.
29% of small businesses fail because they run out of cash.
The Strategic HR Fix: Did you know that the top expenses in business are 1) insurance 2) taxes and 3) employees? (source). If you do not have a strategic HR advisor there to assist you in managing these expenses, it’s quite possible that you’re paying too much. Recently, a former client of mine was struggling with letting a six-figure executive go who’s impact and skills were no longer felt in a tangible way at the company. To make matters worse, the company was very much cash-strapped and failed to have oversight on employee vacation accrual and use. We were able to put the financial projections and implications on paper and make recommendations for what to do next. The difficult decisions to let the executive go (gracefully) and put in accountability measures for vacation usage wound up saving the organization a significant amount of money that could be re-invested into the business or set aside for a rainy day.
Key Takeaway: A strategic HR advisor can project the financial implications of employee-oriented decisions and recommend a clear path forward.
42% of small businesses fail because there is no market need for products or services.
The Strategic HR Fix: This one can be tricky because in a small business – especially in a startup where the current owners are the founders – there can be a dogged obsession with seeing a singular idea come to fruition. This obsession can pay dividends if there’s a market for the product and/or services the founder wants to bring to market but what happens when there is no market? What happens if there is a market but the company is trying to sell to the wrong demographic or packages it the wrong way? I remember feeling really bad for an older gentleman at my incubator who dumped his entire 401k into entrepreneurial efforts. He was working on developing a mobile game that was so singular in focus that there was no market for it and the cost to bring it to market was too much of a burden to bear. Small businesses who fail because there is no market need for their products or services usually establish an organizational culture where no one can tell the CEO “no.” It doesn’t take a rocket scientist to figure out no one’s buying what you’re selling but it does take a reality check and courage to pivot and say “okay, what’s next?” and to create an environment where subordinate employees feel empowered to add value even if it means disagreeing with senior leadership.
Key Takeaway: A strategic HR advisor can help create a culture of trust and help identify talented professionals who can help your vision become profitable.
82% of small businesses fail because they experience cash flow problems.
The Strategic HR Fix: If we are being totally honest here, most small businesses are one emergency away from going out of business. That emergency could be dried up sales, an inability to make a bloated payroll, a customer who wants to sue the organization, or legal fines and fees due to legal non-compliance (just to name a few). A strategic HR advisor is able to help manage corporate expenses and make smart recommendations – like business and errors and omissions insurance – that reduce overhead and serve as a safety net in the event of a business emergency. Taking an intentional and strategic approach to managing the human resources in your organization is the missing key to small business longevity.
Key Takeaway: A strategic HR advisor can manage costs on the biggest overhead items in your budget while also making recommendations that preserve peace of mind in the midst of the ebbs and flows of business.
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