Sunday, February 25, 2018

Should You Pay Your Interns? The New Guidelines You Need to Know Now!

Are You Paying Your Interns?

It is once again the time of year that many high school and college students and soon-to-be grads are looking for internships. All know that being an intern can be a great way to explore or jump start their career.

However, in recent years a debate has surfaced as to whether interns should be paid. Those on the “pro” side say that interns are doing the work so deserve the money. Those against paying interns say it is a learning experience and does not warrant a salary.

So, what is an employer to do?

The Department of Labor set out to aid companies in answering that question. They established a “6 Factor Test” to help employers determine if their interns were entitled to receive the minimum wage under the Fair Labor Standards Act.

In order for an internship to be unpaid, the DOL stated that the following criteria had to be met:

1.  The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment.

2.  The internship experience is for the benefit of the intern.

3.  The intern does not displace regular employees, but works under close supervision of existing staff.

4.  The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.

5.  The intern is not necessarily entitled to a job at the conclusion of the internship.

6.  The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
Many employers believed these guidelines to be too restrictive and limiting.

Early in 2018 the Department of Labor revised this test to answer these concerns. The new test is designed to give employers more flexibility to hire unpaid interns. 

It is called the “Primary Beneficiary” test. In order for companies to hire unpaid interns, the intern must be the “primary beneficiary” of the internship, not the company. 

This new test is thought to be more flexible. It allows for the determination to not pay an intern to be based on more than one factor and can be decided on a case by case basis

The new factors to determine paid versus unpaid interns now are decided by the following criteria:

  • Whether an intern clearly understands that there is to be no compensation and that any promise of compensation implies that the intern is an employee.
  • Whether the training provided during the internship is similar to what would be learned in an academic setting, including hands-on training and clinics.
  • Whether the intern receives academic credits and/or the internship is closely related to the intern’s course work.
  • Whether the internship follows and accommodates the intern’s academic calendar.
  • Whether the internship is limited to the time it takes to provide the intern with “beneficial learning”.
  • Whether the intern is doing the actual work of paid employees instead of simply complementing the work of the company’s paid employees.
  • Whether the intern and the employer fully understand that the intern is not entitled to a paid job after the internship ends.

Despite these updated guidelines, I believe there are very real benefits for companies that pay their interns.

A Paying Internship will Attract a Larger Number of Quality Interns
One of the main problems with unpaid internships is that despite the incentive of increasing their experience, many need the money. Most college students and graduates are in debt.  They simply can’t afford to work for nothing.  

Their options are to forgo applying for your internship in favor of one that pays, applying for your internship and taking a paying part-time job to make ends meet, or deciding to avoid interning at all and find a paid position.

When you opt to pay your interns, your internship will become much more attractive.  This will ultimately increase your applicants and provide you with a wider range of talented applicants from which to choose.

A Payed Internship Helps You Avoid Litigation
An increasing number of unpaid interns have been successful in suing the companies that hired them. Citing unfair labor practices, these interns have not only won their suits, but the companies have suffered unwanted negative publicity.

In addition, following the Department of Labor’s internship guidelines, even the newly revised ones, might not always be easy. Opting to pay your interns instead eliminates you from having to worry about them.

Pay Equals Professionalism
For Interns ~ Pay Equals Professionalism! This is my Top Reason Why Paying Your Interns Makes Sense!

An intern that gets paid will take their internship more seriously. There is a fundamental feeling of satisfaction and professionalism that comes with getting paid for your work.  This is part of the experience an intern craves.  

In contrast, an unpaid intern may feel like nothing more than an observer instead of an active and important part of your team. They may feel “less than” and will be hesitant to jump in and offer their insights or even ask questions.

Paying your interns will also give them a better feeling about you and your company.  And this bodes well in the event you want to hire your best interns now or in the future.
The Bottom Line - Getting Paid will give Your Intern more confidence and a better stake in both the internship and your company! 

Discover more about why you should consider paying your interns here!

No matter whether you choose to pay your interns or not, employers need to be savvy when it comes to the existing internship guidelines, and any to stay abreast of any changes. Understanding how these rules impact how you treat your interns is crucial to keeping your company compliant and safe.

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