With warm weather rapidly approaching comes the return of summer interns to many workplaces.
There are a lot of benefits to using interns. Doing so can help develop new talent and get future employees interested in your field. Internship programs also allow students to get that hands-on experience many of them need to earn their degrees.
But there are some legal pitfalls employers need to be cautious of — namely, should the interns be paid or not.
Paid or unpaid?
Employment law attorney Abby Warren of the firm Robinson & Cole LLP offered some reminders about summer interns and how to avoid running into trouble.
Employers already know that non-exempt employees need to be paid at least minimum wage for any work done. But when it comes to interns, this isn’t always the case.
Interns can be unpaid under certain circumstances. Mainly, if the intern is considered the “primary beneficiary” of the relationship.
Here are the factors courts use to determine what kind of relationship employers and interns have, and whether or not interns should be paid:
- Do the intern and employer both understand there is no expectation of compensation?
- Does the internship provide training similar to what would be given in a classroom?
- Is the internship tied to the intern’s formal education (are they getting credit for it?)
- Does the internship correspond with the intern’s academic calendar?
- Does the internship take place only during a limited time period?
- Does the intern’s work complement that of an employee’s?
- Do both the intern and employer understand there is no guarantee of a full-time job after the internship?
Cost of misclassification
This test is flexible and there is no specific factor that gives you a firm answer, but if you can answer yes to many or all of these questions, you’re likely OK to call your program an unpaid internship. If you answer no to most of these questions, the position is probably simply a summer job.
It’s important to get this right. Incorrect classification can lead to lawsuits, backpay, damages and other penalties.