Hiring Interns? Read this first so that you don't break the law.
Getting an intern can be a great thing for any small business owner or entrepreneur. But only if you do it right. Here are the big things you need to know about your responsibilities under the law as an employer if you want to hire an intern.
1. You have to pay them.
There is a misconception in the small business community that you don't have to pay your interns. In almost all instances, you have to treat an intern the way you would treat an employee. That includes paying them.
You should pay them at least minimum wage.
There are really very few exceptions. The most likely ones are:
- You run a non-profit. A non-profit's interns can be considered volunteers and can therefore be unpaid.
- A student is getting college credit for the work they are doing in your business.
- You meet the very narrow factors the Supreme Court as outlined: 1) Your internship is really, training for the intern, 2) the internship is for the interns benefit--not really yours, 3) the intern isn't doing someone else's job and is under close supervision, 4) You as an employer do not derive any benefits and at times are actually impeded by the intern, 5) the intern does not expect a job at the end of the internship, and 6) you and the intern have a mutual understanding that there will be no compensation.
2. You should pay them at least minimum wage.
The law is pretty clear on this.
"If an employer uses interns as substitutes for regular workers or to augment its existing workforce during specific time periods, these interns should be paid at least the minimum wage and overtime compensation for hours worked over forty in a workweek."
This is a direct quote from the United States Department of Labor website. You are obligated by law to at least pay an intern minimum wage. This is especially true if the intern is doing work that is specific to your business like providing clerical work or assisting customers. Even if the intern is learning something new while interning with you, it is usually not substantial enough to remove your obligation to pay the intern.
3. There should be a specific start and end time.
A standard internship has a clear and specific start and end date for the intern. It is not indefinite.
Also, if you use the internship as a trial period or a probation period before you make a hiring decision, the law will look at that relationship as one between an employer and employee.
Listen, people like Oprah and Charlie Rose--people you know--have been sued over this issue and have had to pay millions of dollars in settlements and attorneys's fees. There are bigger fish to fry. Don't let hiring an intern get you in trouble.
- "Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act." U.S. Department of Labor. April 2010. https://www.dol.gov/whd/regs/compliance/whdfs71.htm.