Using (or Abusing) an Unpaid Intern

Dear Anita,

I run a small business on a shoestring. We are starting to get really busy but I still can’t afford to hire someone else. How can I go about getting an unpaid intern?

Interncarrying stacks of takeout coffeesDear “Budget Boss,”

College interns seem to be a dime a dozen in summer. In 2015, 63% of college grads with a bachelor’s degree had participated in internships, according to the National Association of Colleges and Employers. Of those, about 61% were paid, and 39% unpaid. How can employers get away with not paying minimum wage? Many unpaid internships may be walking the line of legality. Basically, if an intern does any work that is useful to the employer, the internship may not meet the exception in the Fair Labor Standards Act.

It’s easier for non-profits to utilize unpaid internships; they can simply classify the intern as a volunteer. But in the for-profit private sector, you must meet the employment exclusion or it is assumed the intern is, according to the FLSA, “suffered or permitted to work” for compensation.

Here are the six criteria from the Department of Labor to exempt an unpaid internship from being an employment agreement:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Unless you work closely with your local college or university to make sure the internship meets the educational requirement, chances are, you’ll have to pay your intern minimum wage. If you have fluctuating needs for additional help, consider hiring flexible personnel from a staffing company for the months, weeks, or even days that you need help.

Readers: How have you benefitted from an internship – paid or unpaid?

Do you have a job-related question? Ask Anita.

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4 Comments (+add yours?)

  1. Tiffany Lieu
    Jun 14, 2016 @ 15:18:27

    I probably will not have a chance to look into internships until I graduate with a Bachelors. From above, the employer was operating on a shoestring budget and was looking for an intern. Minimum wage does not hurt as the law requires although I have noticed over the years that some employers have been able to qualify for stipend compensation to interns that is less pay than minimum wage. In some cases, these employers might not be able to keep up with temporary agencies compensations. I found out from this temporary agency manager I worked with that for each hour of housekeeping the employer had to allocate $2o from which I collected $10.50/hr. to start. It is better to give so many employers more choices in order to promote more hiring.

    Reply

  2. Mischi
    Jun 14, 2016 @ 15:03:43

    Dear Anita. A couple months ago I reported that I had embarked upon a career change into the world if aviation over the past few years and as of last month, I am happy to report that not only did I pass my commercial pilot check ride, I am now a working pilot. Blue skies

    Reply

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Disclaimer

Anita Clew's blog posts are intended for general guidance and should never be taken as legal advice. In all instances where harassment, inequity, or unfair treatment is believed to be present, please consult your HR Department or legal representation.
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