Not all internships are alike and to avoid running afoul of the U.S. Department of Labor (DOL), it's important for hiring companies and interns to know what's expected in terms of training and compensation.
The DOL bases its guidelines on the Fair Labor Standards Act (FLSA), and the intention is to discourage employers from treating interns as a free labor pool. The FLSA was created to ensure all workers receive at least a minimum wage. As states begin to raise the minimum wage level, the result could be fewer internship opportunities.
The guidelines are meant to reinforce that internships are for educational training rather than a replacement for employees, even if a student is receptive to doing anything to get experience. Many employers spend considerable time training and mentoring their interns and do not derive much benefit from having them complete an internship.
Other organizations, however, expect interns to jump right in and do the work of a regular employee. It's possible the guidelines will cause these companies to eliminate internships if they don't want to pay, resulting in fewer opportunities for students.
Practical Guidance for Employers
While it is not required that each and every one of the seven points in the DOL checklist is followed to make an internship qualify as unpaid, it remains prudent for a company to err on the side of caution when interpreting the guidelines. If an intern successfully challenges their unpaid status after the fact, it could result in stiff penalties.
These are the guidelines governing when an intern must be paid:
1. The employer should state at the outset that the intern is not entitled to wages for time spent in the internship. In no case should any payment be implied.
What It Means: If an intern was putting in eight hours a week, then gets an assigned workload and schedule resembling a full-time employee, pay them.
2. The internship (even though it includes the actual operation of the employer's business) should be similar to training given in an educational environment and include hands-on experience.
What It Means: Make it a combination of education and actionable work.
3. The internship should tie in directly with the intern's academic coursework or the intern should receive academic credit.
What It Means: Work should be meaningful (not fetching coffee and dry cleaning for the boss). If the intern is getting no college credit, payment is advisable.
4. The internship should correspond to some extent with the academic calendar, accommodating the intern's academic responsibilities.
What It Means: Honor the student's exam schedule and other campus events. Expect to be inconvenienced.
5. An internship should have a set time frame and when the intern stops benefiting, it should end.
What It Means: Don't let students just sit around or repeat the same tasks for the entire internship.
6. The intern should not displace regular employees, but work under close supervision of existing staff.
What It Means: If the staff doesn't have time to direct an intern, reconsider.
7. The intern is not necessarily entitled to a job at the conclusion of the internship.
What It Means: If an intern is guaranteed a job, this is not an internship. It's an orientation and requires payment.
Internship Best Practices
Here are some additional best practices to make an internship a satisfying experience for all involved:
Make Sure the Experience Is Supervised
Interns shouldn’t be left alone in the office and should always have a point of contact while on the job. They should also know how to contact their immediate supervisor and understand how and when they will receive feedback.
Set Times for Evaluation
All employers should schedule three evaluations with their interns. One should be held after two weeks, another at the halfway point, and the last one at the end of the internship. Feedback is key in order to educate interns so they can learn from the experience.
Switch Up the Workload
Interns are like sponges. They are not employees (with specialized skills) and they should be learning about different parts of your business. Rotational programs are a great way to create a learning experience that helps interns understand what type of work they like and what they are good at.