There is no question that the use of interns has exploded over the past few years. According a recent surveys by the National Association of Colleges and Employers (NACE), most employers believe that interns are the best source of entry level career employees.
Many employers, however, are unsure whether they need to pay interns. The legal answer, essentially, is that it depends. (surprise, surprise)
Whether an employer must pay an intern for their work depends on the experience they will receive. Although the Fair Labor Standards Act requires employers to pay at least the minimum wage to employees, the U.S. Department of Labor (DOL) has developed six criteria for identifying which learners/trainees may be unpaid. Apparently, the DOL's use of "learner/trainee" is equivalent to the commonly used term of "intern."
The criteria are:
- The training, even though it includes actual operation of the employer's facilities, is similar to training that would be given in a vocational school.
- The training is for the benefit of the student.
- The student does not displace regular employees, but works under the close observation of a regular employee.
- The employer provides the training and derives no immediate advantage from the activities of the student. Occasionally, the operations may actually be impeded by the training.
- The student is not necessarily entitled to a job at the conclusion of the training period.
- The employer and the student understand that the student is not entitled to wages for the time spent training.
Other criteria that have been questioned are the payment of wages and the expectation of a job after graduation. In many cases, the employer pays a stipend to students for their meals and lodging or to assist with tuition. This is not considered payment of wages for the purpose of determining whether a student is an employee. Likewise, the fact that the employer may ultimately hire the student does not make the intern an employee as long as there was no promise of a regular full-time job made to the intern prior to or during his/her internship.
-- Steven Rothberg is the President and Founder of CollegeRecruiter.com.