Hiring Interns: What You Need to Know About Paid and Unpaid Help

An Internship Is Not Synonymous with Unpaid Help

One of the biggest misconceptions about interns is that they are all unpaid. There is an old connotation that makes people think of interns as free help. 

But, many internships in the United States are paid. The U.S Department of Labor regulates internships to ensure that workers are fairly compensated. In many cases, interns receive at least minimum wage under guidelines of the Fair Labor Standards Act (FLSA).

So, What Is an Internship? 

An internship is not defined as unpaid work. Instead, it’s defined as a temporary or short-term opportunity for a student or new worker to learn and gain real-world, hands-on experience. Internships often last between one and six months and are usually coordinated with college or university programs or job training organizations like CareerSource Central Florida.

In many ways, internships are designed to help the intern more than the company that hires them. The goal is to help the intern get training and education

But, that doesn’t necessarily mean that there are no benefits for the companies that hire interns. There are plenty of benefits for companies that bring on interns.

Why Hire Interns?

There are benefits for companies that hire interns, whether they are paid or unpaid. When you hire interns, you:

  • Receive extra temporary support for your organization.  
  • Give new leaders within your organization an opportunity to cultivate management skills. 
  • Help your company identify potential employees for when you are ready to find and hire talent.
  • Help your company improve processes by gaining new perspectives (from workers who are more likely to share feedback than full or part time employees).
  • Get your organizations more involved with and recognized within your community. 
  • Make an impact by educating the next wave of workers.

Even unpaid internships can provide benefits to organizations big and small. 

Guidelines For Unpaid and Paid Internships 

When you decide on hiring interns, you need to determine if it will be a paid or unpaid opportunity. To help you decide, consider the guidelines put in place by the U.S. Department of Labor’s Fact Sheet for Internship Programs Under The FLSA.

These guidelines act as a “primary beneficiary test” to help you determine whether the intern should be categorized as a paid or unpaid intern. 

No single factor is in the list is determinative. But, the guidelines can help you analyze the position and determine if the worker is entitled to at least, minimum wage and potential overtime pay. 

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Other Factors to Consider When Hiring Interns

The seven guidelines listed by the Department of Labor can help you begin to understand how to categorize interns and employees. But, there are other factors you should also consider. 

  • State and Local Regulations: State and local governments may have their own rules and regulations in addition to federal guidelines. Look into the labor rules of municipalities that your business operates in to get additional information. 
  • College Credit Guidelines: Many internships are set up so the intern receives college credit for the work. If you are hiring interns through an educational program, work closely with the institution to make sure you understand what is expected of your company and the internship program. You want to ensure that you do your part to help the intern get full credit for the work. 
  • Nonprofit Organizations: The intern process is a bit different for nonprofit and for-profit organizations. Nonprofits are able to bring on unpaid volunteers in a way that nonprofits are not. If you run a nonprofit, consider if you are better off bringing on volunteers instead of interns. 

What’s Right for Your Organization?

To determine if hiring an intern is right for your organization and if that position should be paid or unpaid, start by looking at the role you wish to fill. 

Consider your goals, and list the description of the job. Outline the tasks the intern will complete and how many hours of work will be required. Then, compare your expectations to the primary beneficiary test to see if the role should be paid or unpaid. 

If you still aren’t sure, seek professional help to determine if hiring paid or unpaid interns is right for your organization. 

Get Help with Hiring Interns

Are you interested in hiring interns, but don’t know how to start the process? Do you need help following proper federal and state guidelines for paid interns? 

CareerSource Central Florida is here to help. Request your free consultation to see how we can help you expand your workforce through internship programs.

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