School’s almost out for college students, and you might be thinking of recruiting an intern to work on some of the wish-list projects you’ve left lingering on the back burner. Let’s be honest, a marketing student might even do a better job at keeping up with your blog posts and social media presence –or maybe we’re the only ones who struggle with sporadic content syndrome? Free labor may sound like a no-brainer, but employment law guidelines shouldn’t be taken as lightly as our content calendar. Here are some things you should know before “hiring” unpaid interns.
In January 2018, the U.S. Department of Labor released new guidelines related to unpaid intern programs. The guidelines specifically discuss how to determine whether an intern or student worker should be considered an “employee,” and therefore entitled to minimum wage and overtime pay.
The Department of Labor refers to the “primary beneficiary test,” which is generally more flexible than the previous 6-part analysis. The primary beneficiary test focuses on the “economic reality” of the relationship between the employer and intern to determine which party is the “primary beneficiary” of the relationship.
There are seven factors that are considered as part of the primary beneficiary test to determine whether the employer or intern is the primary beneficiary of the internship. We’ve created seven questions based on the seven factors for employers to use in planning to recruit unpaid interns or evaluate your existing unpaid internship program.
Does the intern clearly understand that there is no expectation of compensation?
Any expectation of compensation, even implied, could suggest an employment relationship.
Do you (as the employer) provide training to the intern that would be similar to training they would get in an educational environment?
The internship should provide hands-on training and experience that benefits the intern.
Does the intern get any academic credit for the internship, or is the internship work tied to their coursework?
If the intern gets academic credit or is working as part of a university-sponsored program, then you (as the employer) don’t appear to be exploiting free labor from someone who should be paid like a normal employee.
Consider reaching out to a nearby university to ask about partnering with academic programs they already offer to students. Many universities have programs that offer free assistance provided to companies by students as part of the students’ curriculum.
Does the internship correspond with the intern’s academic calendar?
Avoid setting rigid working hour requirements. The intern may appear more like a typical employee if the internship doesn’t allow the intern flexibility to prioritize their other academic commitments.
Is the internship limited to a certain duration that corresponds to the intern’s learning?
The internship should only last as long as is reasonable to provide the intern with beneficial training and hands-on experience. In other words, your intern shouldn’t be an intern long enough to become an expert.
Does the intern fill in a position that would otherwise be filled by a paid employee, or does the intern’s work complement the work of existing employees while still providing educational benefit to the intern?
The intern shouldn’t be given projects in a silo and told to figure it out on their own. They should be given projects that are related or complementary to work being done by existing employees, and they should get some educational benefit from participating in the ongoing projects.
Does the intern expect that they may or will be offered a paid job at the end of the internship?
Don’t make any promises, and don’t even imply that you might be able to hire the intern at the end of the internship.
These seven questions are not the only questions to consider, and no single factor or question is more important than another. It is possible to create an internship program that is productive for both parties, but you should evaluate all of the facts and circumstances to ensure the intern is ultimately the “primary beneficiary” of the internship.
A note of caution: The factors discussed above are based on federal standards, but your state may have more strict rules, so be sure to check for any additional state-level standards.
Want to make sure your internship program won’t get you into employment law trouble? Reach out for guidance!
*This blog provides general information for educational purposes only. It is not intended to constitute specific legal advice and does not create an attorney-client relationship.*