Summer Interns are Coming - Are you Prepared?

If you are planning on hiring summer interns this year, you should be aware of the issues involved. Employers always ask the question, should I pay my interns? The easiest and safest answer is yes, you should pay your interns at least the minimum wage and thereby avoid any potential claims and issues.

However, now that the Department of Labor has adopted a "primary-beneficiary test" for determining whether interns are employees, more employers are considering have unpaid internships.

This new text eliminates the prior rigid test whose six parts all had to be met for someone to be considered an unpaid intern and not an employee.

The new federal guidelines apply in California, as the state doesn't have policies or case law on the topic.

The new DOL test does not require each of its seven factors to be met. The new test includes consideration of the extent to which:

• Both parties understand that the intern is not entitled to compensation.
• The internship provides training that would be given in an educational environment.
• The intern's completion of the program entitles him or her to academic credit.
• The internship corresponds with the academic calendar.
• The internship's duration is limited to the period when the internship educates the intern.
• The intern's work complements rather than displaces the work of paid employees while providing significant educational benefits.
• The intern and the employer understand that the internship is conducted without entitlement to a paid job at the internship's end.

If an employer decides to offer unpaid internships, there must be clear communication and documentation that both the intern and the employer have agreed that the internship will be unpaid.

Employers should also connect the internship with the academic progression of the intern. If the intern can get academic credit for the internships, it will go far in supporting that the internship is to the primary benefit of the intern.

Employers should be cautious that managers do not view interns as potential free summer labor. Employers should provide interaction, learning, mentoring and other training opportunities to create a valuable experience for their interns.

Lauren Sims is the article’s author and the Director of Human Resources.

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