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Internships: To Pay or Not to Pay?

Christine Batten, PHR
by Christine Batten, PHR on May 19, 2015


The use of unpaid interns is permitted, but only under limited circumstances. Internships do not amount to “free labor,” so keep the following criteria in mind when you structure your internship program. If the internship does not meet certain criteria, you should consider offering compensation for positions held by students.

There are limited circumstances under which individuals who participate in “for-profit” private sector internships or training programs may do so without compensation. This may apply to interns who receive training for their own educational benefit if the training meets certain criteria. The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program. The following six criteria must be applied when making this determination:

  • 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
  • The internship experience is for the benefit of the intern
  • The intern does not displace regular employees, but works under close supervision of existing staff
  • 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
  • The intern is not necessarily entitled to a job at the conclusion of the internship
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship

It is important to keep in mind that the purpose of using unpaid interns is primarily to provide an enrichment experience for the student, not to supplement your workforce. After all, if employers could have people work for free, wouldn’t everyone do it? If your immediate need over the summer months is temporary help, you may simply wish to consider hiring students who are out of school for the summer.

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Christine Batten, PHR
Christine Batten, PHR

Christine has over 20 years of HR related experience with a background in labor and employment law.