Summer Interns - Paid or Unpaid?
Well, it's that time of year again - time to hire summer interns, but do they have to be paid? In most instances, the answer is yes and if you think the Department of Labor won't take action against you for not paying your summer interns, you would be wrong.
In an article written by Steven Greenhouse for the New York Times last year, he notes that the Labor Department is cracking down on firms that fail to pay interns properly and expending efforts to educate companies, colleges, and students on the law regarding internships.
Nancy J. Leppink, the acting Wage and Hour Administrator, says: "If you're a for-profit employer or you want to pursue an internship with a for-profit employer, there aren't going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law."
Does this mean you can never have an unpaid internship? No, but the Department of Labor has set forth six criteria [PDF] for you to follow in determining whether an internship should be paid. This criteria include, that the experience is for the benefit of the intern, the internship is similar to training that would be given in an educational setting, and that the employer derives no immediate advantage from the activities of the intern.
Of all the factors, probably the most difficult to overcome is that the employer receive no immediate advantage or benefit from the intern. Some critics of the test believe that it is out-dated, and feel that it should be more of a mutual benefit test. But, until these criteria are changed, you will have to follow the law and make sure you are in compliance.