Guidance on Hiring Interns
Does work experience have to be paid? Unpaid internships are legal according to United States law. The law requires companies to take the primary beneficiary test, a seven-point test, which determines whether the employer is a beneficiary. As an employer, if you are a primary beneficiary, the law requires you to pay the intern.
The intern is your employee and protected under the Fair Labor Standards Act. Violating the law could result in penalties. The employment act covers all employees engaged under the service contract including interns. If you want the intern to work for extra hours, you will have to pay him.
According to the Fair Labor Standards Act (FLSA), interns working in for-profit organizations are employees and subject to the minimum wage defined by the FLSA. However, if an intern works for a non-profit organization, he is a volunteer and not an employee.
In that case, you don’t need to pay your intern. According to the U.S Department of Labor, it is crucial to take a primary beneficiary test. The department conducts this test to determine whether an employer is a primary beneficiary.
When Do You Have To Pay Your Intern?
Employers pay or do not pay interns usually depending on the position. Unpaid internships are very common in the United States. However, an unpaid internship is legal when the employer and intern agree on it upfront. The unpaid internship must focus on connecting the intern’s degree program and the job duties.
According to the Department of Labor, unpaid interns have job responsibilities that align with their study program. On the other hand, paid interns usually work as regular employees, and their job responsibilities do not align with their study program. So, as an employer, you have to pay them.
Unpaid interns receive special attention from the top management. Not only do unpaid interns receive guidelines, but they also have easy responsibilities. In contrast, paid interns work closer to full-time, and employers view them as entry-level employees.
Should You Pay Interns?
Studies highlight that unpaid internships in the U.S account for 0.5 million to 1.0 million. Statistics show that about 43% of internships in the U.S are unpaid. So, does work experience have to be paid? Should you pay interns? If yes, why should you do that? There are many benefits of paying interns.
Paying interns improves their ability to work diligently and increases motivation. A paid internship gives you more flexibility. You can assign projects to interns and streamline your business operations.
Unpaid interns are full-time school or college students. Interns usually have several hours of classes and homework. At the same time, they do a part-time job and work for you as interns. This is unsustainable practice for interns, leading to a wide range of problems. For instance, this can cause burnout, fatigue, sleep deprivation, and other health problems.
If you want your interns to work responsibly, produce quality results, and meet deadlines, make sure you pay them. Likewise, if you want to promote teamwork in your company and encourage relationship building, paying your interns is an excellent idea.
Moreover, research shows that about 25% to 30% of a company’s team starts as interns. It means if you want to hire interns as full-time employees, you should invest in their motivation and skills improvement. Thus, there is nothing better than offering your interns salaries and incentives.
