Most companies are aware of the benefits that offering an internship can provide to both them, and the intern. Internships are a great way for employers to get cheap, or possibly free, workers. At the same time, it's an excellent opportunity for a student to gain relevant experience in their field. As internships have grown in popularity in the past few years, questions have arisen about what exactly an internship is. If you choose to not pay your intern, it is important to make sure that the internship meets the guidelines of the Fair Labor Standards Act. The U.S. Department of Labor's Wage and Hour Division released a six factor test that employers can easily use to determine if their interns need to be paid.
Action Steps
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Six Factor Test by the Department of Labor's Wage and Hour Division
1.) The internship is more about education than contributing to company operations
2.) The primary benefit of the internship is derived by the intern
3.) The intern does not displace employees
4.) The employer derives no immediate advantage from the activities of the intern
5.) There is no guarantee of a job when the internship is over
6.) All parties understand there will be no compensation for the internship
I recommend: Evaluate each of the six criteria to determine if the internship your company is offering needs to be paid or not.
Tips & Tactics
Helpful advice for making the most of this Guide
- If the internship your company is considering offering meets these six guidelines, than offering an un-paid internship is acceptable.
- If the internship does not meet these guidelines, the intern must be considered an employee and be paid at least minimum wage.
- Consider offering a paid internship if it is in your company's budget. You are likely to find that you have a better quality of applicants when offering a paid internship.
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