GRAND RAPIDS, Mich. (WOTV)- Adding an intern to your team, whether for the summer or a semester, can be a great experience for both you and the person interning. However, before you make a hiring decision, or even post the opportunity, there is one question you need to ask. Is the intern position paid? The answer to that question will affect much more than just your payroll.
Unpaid internships have been an acceptable norm for many years, with college students seemingly appreciating the opportunity to add professional experience to their resumes, while businesses enjoyed the fresh ideas and extra help. But, what was once simply considered standard practice is facing increased scrutiny. Today, most students want and expect an internship to be paid, and employers who don’t offer compensation may be missing out. In an article from the National Federation of Independent Business, Jeff Allen, co-founder of AboutJobs.com and InternJobs.com, even points out that “by not paying your intern, you will exclude a segment of the talent pool that can’t afford to spend their time in an unpaid internship.” Students aren’t the only ones expecting employers to pay up, though.
Playing By the Rules
According to the Fair Labor Standards Act (“FLSA”) originally passed in 1938, most interns are required to be paid. Nine years after the establishment of FLSA, the Supreme Court laid out the specifics on how employers could be exempt from paying interns. As a recent Forbes article asserts, the Court’s ruling basically boils down to one thing: “The intern needs to be the party receiving the greater amount of value. More importantly, the company needs to be receiving less value or a loss of value.”
Specifically, the six requirements that must be satisfied for exemption are:
- The internship is similar to the training one might receive in an educational environment.
- The intern is the beneficiary.
- Regular employees closely supervise the intern and are not displaced by the intern.
- The employer does not benefit from the intern.
- The intern is not guaranteed a permanent job upon completion of the internship.
- All parties involved understand that the internship is an unpaid position.
Recent Influx of Cases
While these requirements have been in place for decades, there has been a major uptick recently in the number of cases involving interns suing employers for improper compensation. In 2012, a federal district court ruled in favor of two interns who claimed Fox Searchlight Pictures gave them the tasks of entry-level employees. The same USA Today article that reviewed this case also highlighted several other similar cases, including two interns suing Condé Nast for compensation, an ex-Harper’s Bazaar intern filing suit against Hearst Magazines, Warner Music Group and Atlantic Records being sued, and a group of interns filing a joint suit against Gawker Media. The White House has even come under fire for their prestigious unpaid internship program.
Based on the current judicial climate regarding this issue, business leaders need to think carefully about any internship opportunities they provide. If you’re considering not paying your interns, you will need to lay out clear guidelines on what the interns can and cannot do, who will supervise them, and how the scope of the internship will be communicated to them. And, if there is any doubt, just pay them. Whatever their compensation, chances are it will be far cheaper than a court battle.
EXPRESS EMPLOYMENT PROFESSIONALS