Q&A: Can I Still Hire Unpaid Interns?

By Joanna L. KrotzBusiness on Main

I own a small design firm, and I hire unpaid interns in the summer to provide me with extra support. In turn, I teach them about the industry. But I heard the Department of Labor is cracking down on unpaid internships. Can I still do this?

Yes, on both counts.

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You certainly can continue to rely on unpaid interns this season, if — and this is the key — you really are tutoring them and not using an internship to avoid hiring paid help.

Because, yes indeed, the Fed has been putting pressure on employers who violate minimum wage and other worker-protection laws by using unpaid help. As part of the crackdown — which can result in fines, penalties and claims for back wages — the DOL recently issued an employer update about internship practices that run afoul of the Fair Labor Standards Act.

To stay on the right side of the law (and ethical practices), answer just one question: Is the work of the intern benefiting your business more than it’s educating him or her? If so, you fail the legal test. Any whiff of tapping an intern to save on salary costs, and you’ve stepped over the line.

After that, keep these dos and don’ts in mind:

- Don’t select a student intern because she’s, say, a whiz on Twitter and Facebook and you’ve been looking for someone to launch a social media campaign. If she’s the reigning expert, then who is learning what from whom?

- Do get guidelines from local universities and community colleges. Let them identify candidates to interview, and ask whether the intern will get course credit. It’s not illegal if they don’t get credit, but it moves the needle toward legit should any questions surface.

- Don’t ever use the promise of full employment after the internship as a recruiting tool or incentive. That would mean you’re auditioning an employee, not educating an intern.

- Do set up formal reviews and supervision, so it’s clear the intern is being trained.

And lastly, if the internship seems legally dubious, there’s a simple remedy: just pay the minimum wage. In the end, that could cost you a lot less than the potential damage of a lawsuit and federal penalties.

— Joanna L. Krotz

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