Think Before You Hire an Intern

Historically, companies used internships as a major component of their recruiting strategy, where they attempted to “lock in” new, raw talent while breathing new life into their current staff.

However, today companies are offering a larger number of unpaid internships, strictly as a money-saving tool. This trend has been highlighted recently in the media. In fact, CBS Moneywatch published an article – Stop! Don’t hire that intern – that highlighted the trouble that is waiting for companies who use unpaid interns strictly as free labor. In this article, they state interns (paid or unpaid) must be offered four things:

1. A mentor and adequate supervision
2. A physical place to work
3. Substantive work
4. A calm/structured corporate environment

In addition, if you are viewing interns as free labor – say for a big database migration project where people are needed to scan and organize 5 year’s worth of files – you can/will run into trouble from the U.S. Department of Labor. According to this agency, unpaid interns need to learn professional skills and apply their classroom knowledge; companies cannot use them to replace paid employees, and offering earned college credit is not enough to waive rights to compensation.

The U.S. Department of Labor has, based on a Supreme Court decision, has, therefore, mandated a six-point test for all unpaid internships through their Labor Wage and Hour Division Fact Sheet #71. In other words, an unpaid internship must meet all of these requirements:

1. The training, even though it may include actual work at the employer’s facilities, must be similar to what would be given in a vocational school or academic educational institution. This often occurs where a college/university oversees the unpaid internship and provides academic credit.
2. The training given during the unpaid internship is for the benefit of the trainees – not the employer
3. The interns do not displace regular employees, but work under their close observation. If the employer would have hired additional employees or required existing staff to work additional hours, then the interns are entitled to compensation.
4. The employer that provides the training derives no immediate advantage from the activities of the unpaid interns
5. The unpaid interns are not necessarily entitled to a job at the conclusion of the training period. The unpaid internship should be of a fixed duration – established prior to the start of the internship – and should not be used as a temp-to-hire position.
6. The employer and the unpaid interns understand that the interns are not entitled to wages for the time spent in training.

The important point to remember is that all 6 of these requirements must be met in order for an employment relationship not to exist. For example, an employer cannot simply state that their internship offers academic credit, so therefore, it can be classified as an unpaid internship. That is only 1 requirement of the 6 point test, and it cannot be used as the sole reason for withholding compensation.

Remember, unpaid internships are designed to be a form of experiential learning. It is also designed to give employers the opportunity to guide and evaluate talent – in many cases, actually hindering their current operations.

Temporary workers, on the other hand, can support a seasonal push or project, while making a positive impact on a company’s bottom line. In many cases, mentoring and training are not needed, and they work for the benefit of the company – not the educational institution.

So, if you are in need of continuous staffing for vacation coverage or seasonal fluctuations, temporary workers are a much better solution for your needs.
Finding the right people for your organization is costly and time-consuming. When you partner with a quality, reputable workforce management partner – such as Snelling – both your hiring costs and other intangible costs (satisfaction level, cost of time, etc) are greatly reduced. You can focus on your business. While we will focus on finding the right seasonal workers to best represent your business. Contact your local office for more information.