What Are The Rules For Using Interns?

This is the time of year when students looking to explore a career interest or to gain experience are applying for unpaid summer internships.  As employers consider “hiring” interns, they should bear certain rules in mind in order to avoid running into problems with the U.S. Department of Labor or the IRS.

It is easy for a business offering an unpaid internship to perceive that an eager worker has arrived on the scene to perform whatever services are requested – for free and usually without complaint.  But interns should instead be viewed as people who are in the workplace to explore a particular profession, even where the exploration takes a form that may not always be convenient to the business.

To be certain that an unpaid intern is properly classified as such, a business should apply the following checklist:

  1. The intern must accept the position primarily for his or her own educational benefit, in essence treating the internship as a course of study.
  2. The business must regard the internship as one primarily designed to provide training to the intern, and not for the financial benefit of the business.
  3. Regular employees must not be displaced by the intern.  This means that the business can’t hire an intern to replace, for example, a paid receptionist or secretary.  The intern should work under the close supervision of regular staff, because the point is for the intern to learn from working with others in the business.
  4. The employer should derive no immediate advantage from the intern’s activities, and on occasion the business’ operations may actually be impeded by training the intern.
  5. The internship should be for an agreed length of time, with no promise that the intern will be offered paid employment with the business at the end of the internship.
  6. At the outset, the business and the intern must agree that the intern will not be paid wages for services provided during the internship.

In many situations, these criteria will require that the intern either participate in the internship as part of a course of study – perhaps for college credit – or actually be paid at least minimum wage (including overtime when earned) for the services provided during the internship.

The analysis set forth in this article is provided for general understanding only and should not be considered legal advice.  Counsel should always be consulted for advice regarding a specific situation.


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