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Grow Your Business Your Team

Creating a Successful (and Legal) Internship Program

Credit: bikeriderlondon/Shutterstock

Businesses hire interns to share their field experience with newcomers, get entry-level and administrative tasks done, and help students get the real-world experience they need to be successful. Although these student employees often work in exchange for stipends or academic credit, employers need to be careful: Interns do not equal free labor, and if you're thinking of welcoming interns into your office, there are a few key points to consider before you make your first hire.

Business News Daily spoke with legal and HR experts about providing a beneficial, legally compliant experience for your interns in a for-profit setting.

Pop culture (based on many real-life stories) makes it seem like interns' lives revolve around making copies, standing in long lines to get everyone coffee, and answering their boss's phone calls in the middle of the night, all without a single penny in return. However, there are tasks that an intern could be doing that would categorize them as an employee – which would mean legal entitlement to compensation.

The decision of whether to pay an intern is largely based on what the intern is doing. Adam Kemper, a labor and employment attorney for the Greenspoon Marder law firm, said there needs to be a distinction between interns' duties and a typical employee's duties if you don't intend to pay them.

"On a day-to-day basis, what is the intern doing?" Kemper said. "Shadowing? Running errands? Is he or she (working) independently or supervised?"

"Ensure that (an unpaid) intern is not performing work or taking on responsibilities that would typically be performed by a full-time employee," added Samantha Lambert, director of human resources at Blue Fountain Media.

If there's any doubt whatsoever about whether the worker should be classified as an intern or employee, Kemper advised sticking with "employee" and adding him or her to the payroll.

"What's problematic for companies is that they're having interns run errands, get coffee, buy things for (employees) – nothing educational," Kemper said. "If you want to have someone do that, treat them as an employee and pay minimum wage."

If you decide to pay your intern, that might change the way you structure your program. Paid interns who receive at least minimum wage and overtime pay for working beyond 40 hours per week can technically perform the work of your regular workforce. However, the Department of Labor has a very specific set of guidelines regarding what unpaid interns can and can't do.

If receiving academic credit is not a possibility or the intern is already out of school, Lambert noted, your company must comply with the Fair Labor Standards Act (FLSA). This means your internship program must be designed so your company does not benefit at all from the interns' work, and the experience should be for educational purposes only. The employer should aim to provide the intern with skills that can be used in his or her future career, rather than skills particular to its own operations.

A good way to make the experience educational is to talk to the intern about the differences between school and career and tie their education into their internship.

"Students can have an idealistic view of how their college course has totally prepared them for the full-time position," said Tim Elmore, president of Growing Leaders. "While I can remain very positive about the need for higher education, I always communicate how different an eight-hour workday on the job is compared to a school day on the campus. I talk about the practical value of soft skills … versus the classroom, which measures memorization and test scores."

Kemper advised thinking about the tasks you'd want an intern to do long before you begin searching for candidates. This way, you can clearly articulate the duties and learning experience an intern can expect from your company.

For the full list of unpaid internship guidelines, visit the Department of Labor website.

There are no real rules about the minimum or maximum time frame of internship, but the Department of Labor states that internships "should be of a fixed duration, established prior to the outset of the internship." This means that you can't have someone working for you indefinitely as an intern.

If an intern performs very well and you want to offer him or her a full-time position at the end of the internship period, you may do so, but it is illegal to offer employment from the outset. Any opportunity for the intern to become a regular staff member should only be discussed at the conclusion of the internship, Lambert said.

On a more practical level, Elmore said, an ideal internship should be four to six months long.

"Certainly we can make an impression on a young adult in less time, but real change (i.e., habits and attitudes) requires a longer period of time," Elmore said. "If habits require at least 21 days to form, professional lifestyles may require a few weeks to observe, then a few months to embrace."

Before you implement any kind of internship program, it's a good idea to have an employment attorney review your policies to make sure they're FLSA-compliant, Kemper said. From there, follow these key steps to make sure everyone gets the most out of the intern's time at your company.

Spell out the policies and procedures for the internship and have the intern sign off on them. Don't let interns begin working for you until they review and sign a document clearly stating everything they need to know about the internship, Kemper said. At minimum, this document should state whether the internship is paid or not, how long it is, that there is no guarantee of employment after the internship, and, if unpaid, that the intern is not entitled to wages.

Structure the timeline of the internship. "This preparedness can help ensure that everything runs smoothly and on track as the program progresses," Lambert said. "Set up frequent check-in points and test-like evaluations to identify what's being learned and retained, and what areas need to be revisited and focused on."

Help interns understand their role and make them feel like part of the company. At the end of the internship, you should allow interns the opportunity to evaluate and share what they learned.

"Hold your team and company accountable to providing a good experience and close the feedback loop," said Sarah Nahm, CEO of applicant tracking system Lever. "Have an open-ended conversation to hear from the interns about what they enjoyed and suggestions for improvements."

Elmore added, "Give them time in your meetings … to share how they've made progress in their experience and what they've learned during their internship. This is key to helping them process what actually happened."

Additional reporting by Nicole Fallon. Some source interviews were conducted for a previous version of this article.

Jennifer Post

Jennifer Post graduated from Rowan University in 2012 with a Bachelor's Degree in Journalism. Having worked in the food industry, print and online journalism, and marketing, she is now a freelance contributor for Business News Daily. When she's not working, you will find her exploring her current town of Cape May, NJ or binge watching Pretty Little Liars for the 700th time.