Hiring Summer Interns: Help or Hinderance?

Whether your organization is a small business or a Fortune 500 Company, you may be considering hiring summer interns. Below are a few benefits and drawbacks of such a practice, as well as some important compliance and liability items to consider before accepting the services of an intern.

The most resounding benefit that employers report when offering an internship are the fresh ideas and perspectives that students bring to the company. Employers also state that most interns of the millennial generation hold a wealth of technical acumen and ideas for strategic technology that may be beneficial to the organization. Employers develop vital relationships with universities when recruiting interns. Additionally, employers benefit by creating a pipeline of talented job candidates for future open positions. Another benefit that is often overlooked is that internships provide the opportunity for non-managers in your organization to gain some supervisory experience. Therefore, you may wish to consider assigning the intern to report to an employee who you are developing for a future leadership position.

Before diving into the internship world, there are certainly some drawbacks to internship programs to consider. Employers often report that internship programs are very time consuming and tend to hinder the organization’s operations and productivity. Employers hold the time-consuming obligation of training and mentoring interns, as well as completing paperwork for the university attended by the intern. Some employers liken the experience to hiring a new employee, but losing that employee as soon as the worker is able to proactively contribute to the organization.

The organization must consider wage and hour compliance issues when implementing an internship program. While most interns must be compensated at least minimum wage plus applicable overtime in accordance with the Fair Labor Standards Act (FLSA), the US Department of Labor has laid out specific circumstances under which an organization may utilize the resources of an unpaid intern. If all of these six conditions are met, your company may be able to classify the worker as an unpaid intern:

1. The training, even though it includes actual operation of the facilities of the employer, is similar to what would be given in a vocational school or academic educational instruction;
2. The training is for the benefit of the intern;
3. The intern does not displace regular employees, but works under their close observation;
4. The employer that provides the training derives no immediate advantage from the activities of the intern, and, on occasion, the employer’s operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the training period; and
6. The employer and the intern understand that the intern is not entitled to wages for the time engaged in training.

If all of these six criteria are not met, an employment relationship exists and the intern will be entitled to at least minimum wage plus applicable overtime to remain in compliance with the FLSA.

Another important factor to consider is liability for intern injuries that occur in your workplace.  An unpaid intern would generally not qualify for automatic coverage under the company’s workers’ compensation policy, as this benefit is based on earned wages. Therefore, it is important to speak with your workers’ compensation carrier to discern how to obtain additional coverage for unpaid interns.

Should you decide that an internship program may be right for your organization, the recommended first step will be to contact local colleges and universities to obtain information on the types of internship programs that are available in your geographic region.