Why Unpaid Interns Aren’t Free Labor

Unpaid InternWith their operations streamlined as a result of the poor economy, many businesses today have too much work, with not enough hands on deck to do it.

It’s not uncommon for someone who’s reluctant to hire more employees to  say, “I know, let’s get an unpaid intern to help with that!”

And, why not?  Who wouldn’t like some free labor?  Well, let’s talk about why not.

The risk of misusing unpaid interns:

First of all, that “why not” has to do with getting yourself into trouble with the Department of Labor.

The government has an oar in this water because it wants to make sure that businesses are following wage and hour laws, and of course, paying the government their fair share of payroll taxes.  If you’re misusing an unpaid intern for free labor, you can get your business into a lot of trouble.

If there are unpaid interns working at your company, or you’re thinking of adding an intern to your staff, you need to be very, very sure that you’re meeting the government’s guidelines for unpaid interns.

The DOL provides six tests to determine whether your intern can be unpaid:

  1. While working for you, they must be receiving training similar to that which they would get at a school
  2. That training must be for their benefit, not for yours
  3. Your intern cannot work in place of an employee, but rather must work under the direction of your employee
  4. You cannot derive any immediate advantage from your intern’s activities.  In fact, they might just disrupt your work at times!
  5. They may not be entitled to a job at the end of their training
  6. The intern understands they are not entitled to wages

Some of these provisions are easy to comply with, while others are a bit harder.

Unfortunately, this definitely means that if you’ve been daydreaming about getting an unpaid intern to catch up on all of your backed up filing and those projects that have been languishing unfinished around the office, you’d better just keep on dreaming!

Extra steps to ensure your internship meets government requirements:

If you are unsure that your internship qualifies, there are some additional steps you can take to protect your company.

  • Coordinate your internship with an accredited educational institution. Ask the professor to help you develop requirements that will enable the intern to receive academic credit for their internship.
  • Create a detailed description of the internship program, detailing exactly what the intern will be doing. Be sure that the intern will be developing skills they can take to other employers and that they spend a sufficient amount of their time learning mentors in your business.
  • Consider paying the intern minimum wage. You are more likely to attract and retain a qualified intern if you provide them some financial incentive, and you’ll have the peace of mind knowing you cannot be found on the wrong side of the law.

Unpaid interns are allowed in nonprofits and government environments.  Assuming that you’re a for profit business, remember that free is not always free.   Sometimes the cost of skirting the law is more than the cost of complying in the first place!

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