Smart Employment Practices: Hiring an Unpaid Summer Intern

Published on Wed, 06/25/2014 - 18:32

An internship can be a beautiful thing. For college grads it can be a rite of passage, leading to the career of their choice. In fact, research indicates that job applicants’ chances of hire are much better if they’ve completed a formal internship in their field of choice.

For businesses, there are plenty of benefits too, and we’re not talking free labor (or on the flip side, pure altruism). Try these 10 reasons on for size, for example.

But let’s be honest: there are some risks involved. Business owners seeking to hire an unpaid intern may expect several results – a little more productivity (for very little cost), general kudos for giving back to their community, perhaps an influx of fresh energy and ideas.

What they’re less likely to expect is a lawsuit.

The Potential Liability

The main liability of having an unpaid intern is that you could be sued. Interns who feel their rights have been violated can take legal action, as did two of the interns working on the set of Black Swan.

True, they had agreed to work for no wages, but they were promised “training.” This, they said, they did not get. Unless pouring a lot of coffee can be construed as an industry skill.

What are the Costs?

Truth be told, unpaid internship abuses have become all too common. Yet while the short-term gain of taking advantage of unpaid workers in the guise of offering them “an experience” may be tempting, the costs aren’t worth it. The website Unpaid Interns Lawsuit puts it like this:

“Employers’ failure to compensate interns for their work, and the prevalence of the practice nationwide, curtails opportunities for employment, fosters class divisions between those who can afford to work for no wage and those who cannot, and indirectly contributes to rising unemployment.”

Protect Yourself BEFORE Hiring

1. Be fair.

So how do you offer a successful program without exposing yourself to the liability of a lawsuit? The first rule is simple: internships should be fair, not exploitative. What does fair mean? Here’s a fact sheet provided by the Fair Labor Standards Act (FLSA) to point you in the right direction.

2. Spell it out.

To make sure the position actually benefits your intern, be intentional about how you structure the program. Set goals to benefit both you and your intern in advance, and create a strategy to accomplish those.

3. Get insurance.

Unfortunately there is no guarantee against a lawsuit, and as mentioned, the costs can be grave. To protect your company and yourself, ask us about Employment Practices Liability (EPL) insurance. It’s a good protection to have in place – even if you aren’t hiring an intern.With the right planning and insurance, you can create a program that benefits everyone involved – confidently.