We are well into a sweltering summer. Our childhood days free of bed times and routine are a distant memory. You may recall your youthful summers lying out by the pool, playing with your friends, or perhaps getting the chance to make money babysitting or mowing lawns. You earned money without consideration for time clocks or minimum wage rules. Nowadays, teenagers and young adults often spend their summers working internships. In lieu of earnings they gain experience. Increasingly, high school and college students are expected to build their résumés doing internships in their fields of interest. Your business may be considering an internship program. But be careful. Your summer internship may violate the Fair Labor Standards Act.
Primary Beneficiary Test
Whether a worker is an employee or an intern depends upon who is the primary beneficiary of the relationship. Like so many legal interpretations, the courts apply a flexible multi-factor test. In other words, no single factor is determinative. The test balances the following factors:
- The extent to which the intern and the employer clearly understand that there is no expectation of compensation.
- The extent to which the internship provides training that would be similar to that which would be given in an educational environment.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Duration and Education
While no single factor is conclusive, the key to an internship is that it is for the educational benefit of the intern – not the profit of your business. Your business should not make money from the intern’s work by supplementing your employees’ work. In fact, the time spent teaching an inexperienced person may involve more labor costs for your business and reduce productivity. This is particularly the case when the intern is not expected to learn how to eventually perform the job independently as a trainee would. Moreover, this is the reason why an intern does not expect pay or employment at the end of the internship: they are not displacing your workforce. An internship is more akin to a clinical course than a job. It is also for a set duration. It operates around the academic calendar.
The summer break is an ideal time to offer an internship. Here are four best practices to make sure your internship is in compliance:
- Solicit project ideas from your employees. Before you create an internship, you need to identify what the intern should expect to learn and which employees will work with the intern on those projects.
- The advertisement should clearly state the length of the internship and whether it is paid or offers a stipend.
- Structure the projects around the intern’s educational goals. Remember, they are learning practical skills and building their résumés.
- Provide the intern with consistent feedback and supervision. Think of it like a progress report for each assignment.
Summers may not be as carefree as they used to be, but that doesn’t mean that they are no longer enjoyable. Students need practical skills, and internships are a wonderful setting for them to gain experience. They are also an opportunity for you to share your knowledge, grow your industry, and improve the next generation’s workforce.