Internship Guidelines: Paid vs Unpaid | Complete Payroll

Are you planning to hire summer interns, or planning an internship program? If so, make sure you're up to speed on what that means in the modern workforce.

Internships used to be 12-week, unpaid stints in the working world where students or recent graduates were expected to pick up at least an idea of what real jobs were like and what would be expected of them in their chosen field.

These days, the rules have changed.

One of the nation’s leading lawyers in employment law gives the use of unpaid interns a thumbs-down. Why?

First and foremost, the Labor Department’s guidelines are quite strict about when employers can legally avoid paying interns at least the minimum wage. These guidelines say that:

• the internships must resemble vocational education;
• the internship experience must be for the benefit of the interns;
• the interns must work under close supervision;
• the interns' work cannot be used as a substitute for that of regular employees;
• the interns' work cannot be of immediate benefit to the employer.

This doesn't sound like most modern internships. In fact, former interns are speaking out, saying that the type of work they were given as entry-level employees was essentially the same as what they were given as unpaid interns.

And, some of those former interns are even filing lawsuits against the companies where they once held unpaid internships. Their claim is that they were actually employees under federal labor laws and demanding back pay.

When and why did this change take place?  Former Secretary of State Hillary Clinton has pointed out that there are no real entry-level positions or on-the-job training in most modern industries. Undergrads and recent graduates are told that internships are important to their future employment, but the statistics don't bear that out.

While students take unpaid internships hoping that they will lead to a job offer or a leg up when applying for paid positions, paid interns get paid an average of nearly $15,000 more in their first job than unpaid interns, according to HRMorning.com. And according to a 2013 survey by the National Association of Colleges and Employers (NACE), there is little difference in employment outcomes between those that have unpaid internship experience and those who have no internship at all.

If you are a profit-making organization and plan to hire interns, you may want to consider paying them at least minimum wage. If not, be sure to follow the Labor Department's guidelines to avoid legal hassles down the road.

Complete Payroll Processing is a payroll processing company located in Western New York.  We service many different types of companies in Buffalo, Rochester, Syracuse, and more. We share ideas to help our clients’ businesses succeed.  If there are any issues in your firm that you’d like us to discuss in our blog, please let us know.