Unpaid Interns: Safeguards to Avoid Legal Issues



Many students will work for an unpaid internship, if they can further their career prospects. They know they’ll benefit from training, business networking or getting a job with the companies once they graduate from college.

But it can be risky for a business.

ID-100162884 stockimagesFor unpaid interns, there are precautions to take to avoid legal hassles with the Department of Labor (DOL) and the Fair Labor Standards Act (FLSA).

People who work in your business must be paid at least the minimum wage and wages for overtime if they work more than 40 hours — unless you comply with FLSA standards for unpaid interns.

You can’t use unpaid interns for your company’s financial benefit – their work must advance their career education and training.

“Under these circumstances the intern does not perform the routine work of the business on a regular and recurring basis, and the business is not dependent upon the work of the intern,” according to the DOL Web site.

In other words, companies risk legal problems if they require unpaid interns to do dull, routine tasks. That would include duties such as errands, answering the telephone or making copies.

The exact wording of DOL’s six criteria:

  1. The internship is similar to training that would be given in an educational environment, even if it includes actual operation of the facilities of the employer;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not replace regular employees;
  4. The employer derives no immediate advantage from the intern’s activities;
  5. The intern is not necessarily entitled to a job at the end of the internship; and
  6. The employer and intern understand that the intern is not entitled to wages.

What does all this mean, especially if you’re a small business? Be careful.

You can take these precautions:

  1. Avoid the appearance of running an illegal internship program. Provide training, and don’t use an intern to perform an expert job. That means telling an intern to do something no one else can do, such as building your Web site.
  2. Even if it’s an inconvenience, provide generalized training.
  3. Make certain you closely mentor and supervise the intern – again not asking the intern to perform specialized tasks for free.
  4. Recruit interns from your local community college or university. If need be, they can advise you and provide suitable students while providing them with academic credit.
  5. Determine a definite duration for the internship.
  6. Also, put in writing that a job isn’t guaranteed at the end of the internship, and that it will be uncompensated.
  7. Don’t use interns instead of paid employees.
  8. Protect your interns from sexual or any other harassment in your workplace.

An internship program can be very satisfying for both you and the intern.

The intern will benefit from a real-world experience.

You’ll find it very gratifying to help a young person get a career head start. (Additionally, on a personal note, I’ve found it interesting to learn the interns’ perspectives.)

Ultimately, you might even find a future employee who has learned insights about your industry, workplace culture and your vision for growth.

From the Coach’s Corner, here are related management tips:

Management: How to Help Employees to Grow Professionally — Managers owe it to the organization to help their employees grow professionally. It’s hard, time-consuming work. But the return on investment is terrific. The organization benefits from higher employee performance and lower turnover. Strong employee retention obviously saves the employer a lot of time and money.

Secrets in Motivating Employees to Offer Profitable Ideas — Savvy employers know how to profit from their human capital. Such knowledge is a powerful weapon for high performance in a competitive marketplace. Furthermore, there’s a correlation among excellent sales, happy customers, and high employee morale. Proverbially speaking, employees are where the tire meets the road.

Non-financial Incentives Motivate Most Employees – Study — Want motivated workers? Recognition for good work is appreciated by 70 percent of workers – a great motivator for high performance, according to a study by two companies. “Workplace technology today, such as gamification, provides many new opportunities for non-tangible recognition,” said Cindy Ventrice, author of “Make Their Day! Employee Recognition That Works.”

Advice for Men: How to Manage Women Employees — You must exercise due diligence to motivate talented employees and retain them for an efficient and productive workplace. But many male managers unwittingly mismanage their female employees.

With Employees’ Help, 3 Strategies to Succeed with Your Strategic Plan — Have you developed your strategy? It’s important to proceed without engaging in self doubt. But you’re concerned about involving your employees? There are three closely related basics in working with your employees to get the job done.

9 Precautions in Training Employees to Protect You from Cyber Crime — It takes a team approach to protect your organization against the skyrocketing rate of cyber crime. Here are nine training precautions necessary to make sure your employees help you guard against security threats.

“The most challenging part of being a boss is that nobody will tell you if your work is suffering.”

-Bill Williams


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





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Seattle business consultant Terry Corbell provides high-performance management services and strategies.