Offering Unpaid Internships? Tread Carefully!

So, your business is tightening its belt. Hiring has slowed down, yet, you still need the extra hands on board. You've heard about working with unpaid interns.   

Could that be the solution for you?

Many colleges have programs which allow their students to work in business settings and get course credit at the same time. 

But an unpaid internship has its own host of legal issues. It's just not as easy as hiring an eager student and promising them a good referral or a chance to work with the big-boys. You need to tread carefully and make sure that you will not be in violation of the labor laws. 

What do you need to know if you want to work with an unpaid intern? Here are some pitfalls as well as some smart practices:

1. Hiring an intern might set back your productivity: This is because the law requires that the intern be there for educational reasons and not as a "replacement" for anyone you could have hired. You will have to devote a large part of your time to teaching the intern, in order to be compliant with the law.
2. Have a learning "curriculum" or a game plan: The law states that the internship needs to be largely for the benefit of the intern, as opposed to the benefit of the company.  Therefore, before bringing on an intern, design a "curriculum" of things you plan to teach the intern. This helps your position that the internship is really for the intern's benefit.
3. Don't use the word "hire": The word "hire" implies an employer-employee relationship.  Similarly, don't use words like "employee" or "employment."   
4. Distinguish between interns and employees: Try not to treat your intern like an employee. Make specific distinctions. Perhaps you need to have special activities reserved just for interns. Or perhaps, special tasks designated just for interns. Either way, your intern really can't be seen as a replacement for an employee you could have hired. 

In conclusion: If you are contemplating the hiring of an intern, be ready for the fact that it may not be the easiest solution. Sometimes, an unpaid intern is the way to go.  

Other times, you might want to pay and hire someone, instead. 

Related Resources

• Opinion letter outlining the criteria for unpaid interns (DLSE)
• FLSA Opinion Letter regarding unpaid interns (FLSA)
• Summer interns can't just be free labor  (msnbc.com)
• Wage & Benefits FAQ (provided by Walters & Caietti, A.P.C.)
• Employment Law FAQ (provided by Kaiser Saurborn & Mair, P.C.)