Should You Pay Your Interns?

Have you ever wondered if you should pay your interns? You have probably heard others praising the benefits of hiring low-cost, energetic, and eager-to-learn interns. But the question on your mind is, should you pay your interns?

Should You Pay Your Interns?

As an entrepreneur and CEO, I often feel like I have too many ideas and too little time to follow through on those ideas. That is where an intern comes in. Every summer, I design an internship program with meaningful internship projects to follow through on my ideas and concepts from the past year. For my thoughts on how to design an effective internship program, check out this video:

I believe in paid internships. My moral and business obligation is to treat my employees with fairness and to compensate employees for their work. Not only do paid internship programs lead to higher quality internship candidates, but they also lead to more motivated, loyal, and hard-working interns.
If the employer and the organization benefit from the interns’ work, then the employer should pay the interns. There are many competitive paid internship positions available. So why would I risk losing quality internship candidates on the grounds that they went looking somewhere else for a paid internship program? While I focus on growing my business, my interns help me follow through and implement my business ideas that would have otherwise remained stagnant.

Fair Labor Standards Act

Some might argue that unpaid internships are fair for the intern and the organization. Interns gain skills and experience which may lead to higher paid positions soon after. Internship programs also provide the interns with exposure to networking opportunities, expertise, and experience in an industry. I agree with these benefits of internship programs for interns, however, unpaid internships violate minimum wage laws if your company does not follow these six requirements under the Fair Labor Standards Act:

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.

If one meets all of the factors listed above, then an employment relationship does not exist under the FLSA. The Act’s minimum wage and overtime provisions do not apply to the intern. This exclusion from the definition of employment is necessarily quite narrow because the FLSA’s definition of “employ” is very broad.

Conclusion

Your conclusion of whether you pay your interns should be an educated decision based on what’s right for your company.  So, should you pay your interns? I strongly believe that paid internship programs lead to better-quality and more dedicated intern candidates. They are mostly likely going to have enhanced skills that your business will benefit from.
Do you believe in paid internship programs?  Let us know your thoughts. For more information on this topic, check out this article.