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To Pay? Or Not to Pay? The Internship Debate for Employers

Written by Angela Finding

When you decide to hire interns for your business, you’ll have a major decision to make: are you going to pay them or not? On the surface, businesses seem divided over whether it’s necessary to pay interns. But are businesses that offer unpaid internships exploiting their interns, or breaking any laws? And are businesses that pay their interns wasting money?

Let’s examine the argument.

Legal Requirements

For starters, understand that it’s technically legal to hire unpaid interns, with only a few caveats under the Fair Labor Standards Act. Unpaid internships must have a clear benefit to the intern in question, such as training or education that will be valuable in the future. They must also not displace any current employees, which means you can’t hire an unpaid intern to do a previously paid role, and they can’t allow your business to derive any immediate advantage.

Paid interns, on the other hand, function more like employees, and are only subject to laws that apply to ordinary part-time and full-time employees.

Benefits of Paying

Even though it’s legal to hire unpaid interns, paid interns are actually more beneficial:

  • You’ll attract better talent. Paid internships tend to attract far more applicants than unpaid internships, which means you’ll have your pick of the litter. You’ll have an easier time training them, and eventually get more out of them.
  • Your interns will work harder. People value work they’re paid for more than work they do for free. The second you start paying someone, they’ll start working harder for you, and investing more in their position.
  • You can ask more of your interns. Once you start paying interns, you’re no longer legally bound in the roles and responsibilities you require of them. You can treat them like junior employees.

It’s true that you get what you pay for.

Ethics

Even if you’re not interested in the benefits associated with paid internships, you should know that there’s a serious debate about whether unpaid internships are immoral. Between 500,000 and 1,000,000 unpaid internships will be offered this year, but the people who take them will already be struggling with low income, low education, a busy class schedule, and crushing amounts of student debt—and they may not even get a job offer at the end of their program. Meanwhile, businesses get to exploit their free labor, and may not offer much training in return.

As a general rule, you should pay your interns. However, if you opt for an unpaid internship program, it’s your responsibility to make sure the intern is getting more out of the program than you are.

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