To Pay or Not to Pay (Interns)
Courtesy SBAM Approved Partner ASE
Question: How do I know if an internship should be paid or unpaid?
Answer: Employers seeking to engage un-paid interns should use the following factors to determine if an unpaid internship would be legal or not:
1. Does the intern and the employer understand there will be no compensation for the services performed?
2. Does the internship provide training that is comparable to that which would be given in an educational environment? This would include clinical and other hands-on training.
3. Is the internship tied to the intern’s formal education program through integrated coursework or the receipt of academic credits for doing the internship?
4. Does the internship accommodate the intern’s academic commitments by corresponding to the school calendar?
5. Is the internship’s duration limited to the period in which the internship provides the intern beneficial learning?
6. Does the work the intern is doing complement the work of paid employees rather than displace other employees while providing significant educational benefits?
7. Is there is an understanding between the intern and the employer that there is not an entitlement to a paid job at the end of the internship?
The test above is intended to offer more flexibility to employers to not pay interns but at the same time force employers to provide the intern a better learning experience during their internship. It is advisable to err on the side of paying interns if the above criteria to an internship program is not clear. For more information about the Department of Labor’s Internship rules go to https://www.dol.gov/whd/regs/compliance/whdfs71.htm.
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