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5 Legal Constraints in Hiring Interns You Need to Know

Written by Angela Finding

Interns are valuable additions to your workforce, and you’ll be simultaneously helping a young person develop the skills and experience necessary to forge a future career—maybe even within your organization. But before you start scouting for candidates, it’s important to know what legal restrictions exist for hiring and using interns.

For the most part, interns function like employees, but in most situations, employers pay interns far less—and sometimes pay them nothing at all. These arrangements aren’t always legal, so make sure you’re familiar with the following restrictions before developing your program.  You should reach out to a legal professional who is familiar with the legalities of internships to answer specific questions about your internship.  The information below, is not intended to be legal advice, but is a good starting point to address some frequently asked questions.

Legal Restrictions for Paid Interns

The Fair Labor Standards Act (FLSA) dictates certain employment standards, which apply to paid interns:

  1. Minimum wage laws apply. For interns in for-profit and private sectors, all minimum wage laws apply.
  2. Overtime laws apply. If your intern works more than 40 hours in a week, they are entitled to overtime pay.

Legal Restrictions for Unpaid Interns

The United States Department of Labor outlines some key criteria for hiring unpaid interns as well:

  1. Training and education must be provided. There must be a clear benefit to the intern, which means you must provide real education and training—you can’t just have them running errands.
  2. The intern must not displace regular employees. An unpaid intern may not take over a traditional paid employee’s job or responsibilities.
  3. The employer must derive no immediate advantage from the intern. The rule of thumb is this; if you make money from your intern’s actions, you should pay your intern.

However, you should also know that unpaid interns are not entitled to a formal job offer once the internship is complete. The intern is also not entitled to retroactive wages for the time they worked.

Beyond the Law

Outside the law, there are a handful of “best practices” that you should follow, even if there are no legal repercussions to breaking them:

  • Don’t make false promises. It’s true that 69 percent of companies with 100 or more employees eventually offer jobs to their interns, but this is not mandatory. Never promise a job to an intern that you can’t eventually provide.
  • Offer fair compensation. Remember our rule of thumb; pay your intern fairly for the amount and quality of work they provide.
  • Always benefit the intern. This is an experience to guide them in their future career. Don’t exploit your interns.

While not complex, these guidelines are important rules to follow, so keep them in mind as you develop your program.

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