Monday, June 2, 2014

6 Factors for Deciding Whether or Not to Pay Interns

Are you planning on hiring interns this summer? Many companies hire interns as “volunteers” without payment, or pay interns less than the minimum wage. But the fact is that internships are most often considered employment, and can be subject to the federal minimum wage and overtime rules. Under the Fair Labor Standards Act, interns in the for-profit sector who qualify as employees must be paid at least $7.25 per hour, and not less than one and one-half times the regular rate of pay after 40 hours of work in a workweek.
There are certain cases in which an individual involved in an internship or training program may do so without receiving compensation. The United States Department of Labor uses the criteria outlined below to determine whether or not an intern must be paid. If all of the factors listed below are met, the Fair Labor Standards Act does not apply to the intern, and therefore the interns are not required to receive compensation.
1.      The internship 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, and works under close supervision of existing staff.
4.      The employer that provides the training derives no immediate advantage from the activities of the intern.
5.      The intern is not necessarily entitled to a job at the conclusion of the internship.
6.      The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
If you have any questions, please let us know!

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