News And Advice

Insights, tips and news for job seekers and employers.

Internships: To Pay or Not to Pay?

Internships are great opportunities for both companies and interns. For companies, it’s an excellent way to get extra help for little or no pay. Plus, it’s a fresh perspective on the business. For interns, it’s a valuable opportunity to gain real-world experience and a great networking experience. Of course there is always the one big question of whether or not to offer paid or unpaid internships.

To have an effective internship, the program should be mutually beneficial. The intern should gain a positive learning experience and the company should have a new perspective on current projects. Unfortunately, not all internships work this way and some interns have even filed lawsuits accusing companies of using interns for free labor. As a company, the last thing you want is a lawsuit that will bring plenty of negative attention. To avoid these situations, companies should ensure they are following the legal requirements of an internship and not violating any labor laws.

So what exactly are the legal qualifications for an unpaid internship? As long as you are not a non-profit, the US Department of Labor states that the internship must meet these six criteria:

  1. The internship should get training similar to how it would be in an educational environment;
  2. The intern must benefit;
  3. The intern doesn’t displace employees, but works closely with them;
  4. The employer providing the training develops no immediate advantage from the activities of the intern;
  5. The intern is not necessarily entitled to a job at the end of the internship; and
  6. Both the employer and intern understand the internship is unpaid.

Basically, if all of the above factors are met, an employment relationship does not exist and therefore the intern does not need to receive payment. For more information on these criteria, visit the US Department of Labor website.

The phrase “you get what you pay for” also rings true when it comes to internships, so unpaid isn’t always the best option. Plus, the pool of applicants might not be as large as it would be if it was a paid internship. Only the people who can afford to work without pay will apply, and that number most likely won’t be as large. When you have a paid internship, top students will compete for them, bringing the best of the best to the table.

It’s important to really weigh your options when deciding whether or not to pay an intern. Design a program that fits the needs of your company and that will benefit an intern. For more information on designing a tailored internship program to suit your needs, contact one of our recruiters today.