Internships: What Employers Need to Know

Offering internships to college students can be an inexpensive way to supplement the workforce and provide students with an opportunity to gain valuable career-related work experience and apply classroom knowledge to real world work in mentored environments. For employers, they offer assistance with seasonal or project needs, and infuse companies with youthful energy and cutting-edge ideas and technologies. Internships can be paid or unpaid, part- or full-time.

Designating the time a student spends with an organization as an internship, however, does not automatically mean the student can be considered an unpaid intern or trainee. The same is true even if the student is receiving college credit for the internship. Whether a student intern must be paid for the work performed depends on whether he or she is considered an employee under the FLSA. To determine whether an employment relationship exists, the following six criteria from the U.S. Department of Labor must be met. A student intern is generally not considered an employee if:

1. The training, even though it includes actual operation of the employer’s facilities, is similar to training provided in an educational program.
2. The training received is for the benefit of the intern.
3. The intern does not displace regular employees, but works under their close supervision.
4. The company does not derive any immediate advantage from the activities of the student and, on occasion, its operations may actually be impeded by the training.
5. The intern is not necessarily entitled to a job at the conclusion of the training period.
6. The intern is notified, in writing, that they are not entitled to wages for the time spent in training.

If all of the factors listed above are met, an employment relationship does not exist under the FLSA, and the FLSA’s minimum wage and overtime provisions do not apply to the intern.

Six Steps  To A Successful Internship Program

1. Set challenging, yet attainable objectives for your intern. Early in the internship, schedule a meeting to confirm that the intern's expectations match your expectations.
2. Provide orientation to the work environment and company policies/procedures. Topics of discussion may include: performance standards, appropriate attire, communication procedures, decision-making channels, and confidentiality. Introduce them to managers and employees to ensure others know their name and role within the organization.
3. Inform the intern of their assigned work schedule, both hours and days of the week, the location of their designated work station and provide technology support (computer and phone).
4. If the internship is paid, complete new hire paperwork and inform the intern of the pay schedule.
5. As your intern becomes trained and adjusts to the work environment, increase complexity and responsibility of assignments. Make every effort to involve your intern with meaningful, challenging projects that relate to his/her academic major and career goals.
6. Make the intern feel like part of your team by explaining how their work makes a meaningful contribution to the mission and goals of your company.

If your organization is going to establish a student internship program, determine the program's objectives, the training that will be provided, and the activities the student(s) will perform prior to the first day of the internship. Taking these steps will not only help ensure the success of the internship program but will also assist you in deciding if a student should be classified as an employee or an unpaid trainee.

An employer that fails to properly classify a student intern as an employee can be liable for back wages, unpaid overtime, unpaid payroll taxes and benefits, and penalties.