For college students looking to beef up their qualifications with professional experience, internships can be invaluable. They get on-the-job training, college credit, and that all-important bullet point on their resumes. Often, internships can lead to full-time jobs after graduation.
Employers have just as many reasons to love internships. You can hire young professionals at the start of their careers and assess their qualifications without a long-term commitment. And because they are working for you for the sake of the experience, interns are often less expensive than your more experienced employees. They are often earning money, but they also see internships as training programs to some extent.
However, you should know that interns are not free labor. Federal law requires you to pay them under most circumstances. In some states, more regulations exist. But for our purposes in this article, we will focus on the internship payment rules under the Fair Labor Standards Act (FLSA). We will then offer tips for crafting an internship offer letter that complies with the law.
FLSA Internship Rules
In the vast majority of circumstances, employers must pay their interns at least minimum wage, with overtime pay when applicable. These paid interns are considered temporary employees under the law, and therefore you must treat them just like any other employee.
However, the FLSA does allow for unpaid internships in a small number of cases. To qualify, internships must meet all the conditions of this seven-part test:
- Both the intern and the employer understand that the internship is unpaid.
- The internship must be similar to training that would be offered in an educational environment, like a school, college, university, or trade program.
- The internship is tied to the intern’s educational program by either integrating coursework or offering academic credit.
- The internship corresponds to the intern’s academic calendar.
- The intern position does not displace regular employees. On the contrary, your existing staff must closely supervise the intern.
- The employer’s business gleans no immediate benefit from the internship. In some cases, the internship program might actually disrupt business operations.
- The employer has not guaranteed the intern a job at the end of the internship.
One exception to the minimum wage rule is the “student learners” designation. If you register your business or organization with the Department of Labor, you may pay student employees 75 percent of the minimum wage. The law requires that these student learners be at least 16-years-old, enrolled in an accredited school, college, or university, and working for you part-time.
What Type of Intern Will You Hire?
Before you hire an intern, you’ll need to create the position. Will your internship be paid or unpaid? You might want to consider hiring paid interns only, as this will ensure that you are in compliance with the internship payment rules under the FLSA.
However, there may be some circumstances in which it makes more sense to take on unpaid interns. Perhaps your alma mater or a local university has asked you to take on an intern. This happens frequently. Many professional degree programs require students to do field placements in the real world prior to graduation. The university often has a team of staff working to help place their students in internship programs with local employers.
As a leader in your field, you want to help the next generation of young professionals. You want to teach them the right way to do their jobs because it will improve the field you work in. You might also figure that offering a valuable educational opportunity will be good PR for your organization.
If you are, in fact, interested in offering an internship solely for the educational benefit of the intern and not because you are in need of additional staff, you might choose to take on an unpaid intern.
What to Include in Your Internship Offer Letter
Regardless of the paid or unpaid status of your internship, you should include the following elements in your offer letter:
- The name and location of your organization.
- The internship start and end dates.
- The intern position title.
- The compensation you are offering. (If you are hiring an unpaid intern, state that the position is unpaid.)
- Non-disclosure or non-compete agreements, when applicable.
- The intern supervisor’s name.
- The deadline for accepting the position.
- A legal statement that defines the intern’s rights to any work or projects they complete during their internship.
What NOT to Include in Your Internship Offer Letter
If you are offering an unpaid internship, it is important that your internship offer letter does not make any statements that would render the position unqualified for unpaid status. Therefore, you should avoid the following in an offer letter for an UNPAID internship:
- A list of duties that includes any of your organization’s routine work. Remember that seven-part test for unpaid internships? The intern can’t displace your regular workers, and you can’t receive any benefit from the internship. If the intern is performing duties that another employee would usually perform, that would clearly violate this rule.
- Any language referencing a “trial period” or “probation.” Again, this language would signal the Department of Labor to think that you are violating their seven-part test. The employer may not guarantee the intern a job at the end of the internship period. If they’re doing a trial-period, what happens at the end of it? Probably a paying job. So don’t say that.
If your organization plans to take on interns, make sure you fully understand the FLSA as it applies to internships. These part-time positions can provide a lot of benefits to students and employers. But if you violate the law, you might be in for some hefty fines, not to mention a damaged reputation. If you want to hire interns but you’re still unsure of how to do it legally, contact an employment attorney. They can help you craft a great internship program that is fully compliant with the law.