Allevity Blog

Unpaid Internships: What you need to know

Oct 14, 2014

Fans of the HBO show “Girls” remember how it all started – with Hannah being let go from her unpaid internship when she asked if it might be possible for her to move into a paid position. Despite the fact that she seemed to be working autonomously within the organization, she was still deemed an unpaid intern and told that there were plenty of college grads vying for her position if working without pay was no longer good enough for her.

While this may have been true, it would also have been illegal under California law. And with the U.S. Department of labor starting to crack down on unpaid internships that don’t meet the requirements of the Fair Labor Standards Act, plenty of “Hannah’s” are getting their day in court.  Many are winning the suits and receiving the back pay they felt they were entitled to.

With so many young people trying to break into the various film and publication industries that thrive within our state, there is certainly no shortage of college grads willing to work for free in order to get a foot in the door. But be careful before you take them up on those offers; hiring an unpaid intern is more complicated than simply saying, “Welcome aboard!”

That is not to say that there aren’t occasions when it is perfectly acceptable to hire an unpaid intern. Within the private sector, there are six determining factors for bringing an intern on without pay:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded; 
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Essentially, what that all boils down to is that if it benefits your company to have an intern on board – you likely need to pay them. If they are doing work other employees would have had to do or are routinely completing menial tasks you may have otherwise had to hire someone for (like filing or answering the phones) than you had better be prepared to give them at least minimum wage, plus overtime.

But if they are coming to you under the supervision of an educational establishment, receiving credit for their work with you, and are actually requiring more of you than you are receiving in benefit from them – they may qualify as an unpaid intern. So long as all parties are in agreement to those terms, the internship has a set start and end date and the goal continues to be educational and training in nature.

Realistically, unpaid internships offer no real benefit to the company – it has to be something you are willing to do because you truly care about training the future leaders of your industry, not because you are hoping to cut payroll costs in order to give your budget an extra boost.

Just remember, there may be 100 Hannah’s at your doorstep willing to work for free, but that doesn’t necessarily mean you can get away with hiring a slew of unpaid interns. Always evaluate the criteria above before making that designation in order to protect your company from fines and lawsuits down the line. 

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