How to Hire an Unpaid Intern
The relationship between an intern and employer is regulated federally by the Fair Labor Standards Act and also on a state level. If an intern is considered an employee, federal law requires that they be paid at least the minimum wage, which will be $7.35 per hour in Missouri beginning in January 2013, and overtime pay for every hour over 40 hours per workweek.
How can an employer hire an unpaid intern? Under federal law, several requirements exist for an unpaid internship to be legal. The main element of the federal regulation is that the internship is for the benefit of the intern, and that it provides the kind of training that the intern could receive in an educational setting. The intern must be supervised thoroughly by the staff, and the employer providing the training should not receive an instant benefit from the intern’s work. When determining whether the employer receives a benefit from the intern’s work, the Department of Labor will find that the intern is an employee if they create productivity for the employer, regardless of the time spent by the employer to train and supervise the intern. This idea of the intern as a student in the workplace is reinforced by the requirement that the intern does not replace the regular employees. Full transparency is also required, as it is mandated by the federal law that the employer and intern share the understanding that the intern will not receive wages for the internship. The federal law supplements this requirement of transparency with the stipulation that the intern should not necessarily be entitled to a job at the end of the internship. This alleviates the risk of an intern performing unpaid work for future wages. If the aforementioned federal requirements are met, than the intern would not be considered an employee of the organization and can legally work for the organization for free.
It is important to remember that on top of these federal requirements, each state may impose its own laws to further regulate the relationship between employer and intern. For an employer to avoid federal penalties, it is best to develop an internship program that is centered on providing an educational experience to the interns without an instant benefit to the company or organization. Of course, an employer can always provide minimum wage and overtime to the intern who works more than 40 hours a week in order to avoid the demands of the Fair Labor Standards Act on unpaid internships.