For many businesses, an internship program can provide more than a seasonal staffing solution. It can be a practical way to develop future workers, strengthen internal teams and bring new ideas into the workplace. Under the best circumstances, such programs are a win-win: Interns gain hands-on experience and perhaps professional mentoring, while employers can evaluate emerging talent in a real-world setting and get some help completing certain tasks or special projects.
To gain those benefits, however, businesses must structure internships carefully. Federal and state labor rules have evolved significantly in recent years — particularly regarding unpaid internships. So, if you're considering rolling one out (or maybe already have interns on-site), here's what you need to know about providing meaningful educational value while complying with current wage-and-hour laws.
According to the U.S. Department of Labor, courts apply the "primary beneficiary test" under the Fair Labor Standards Act to determine when an intern should have the same rights as a regular employee. In a nutshell, if your business benefits more from the internship than the intern does, you likely need to pay that individual.
It's a subjective assessment, no doubt, but there are tests to help you offer unpaid internships relatively safely. The tests evaluate several factors, including the extent to which:
Many employers ultimately decide that offering paid internships is the better option. Such opportunities tend to attract a broader and more diverse pool of candidates, and interns generally don't expect premium compensation. In most cases, paying interns at least competitive entry-level wages can simplify compliance concerns while making your program more appealing.
Compliance issues don't end with whether or not to pay interns. You should also consider other employment-related obligations.
For example, under the Affordable Care Act's employer mandate, applicable large employers (ALEs) generally must offer health coverage to full-time employees — including paid interns classified as full time — if they average at least 30 hours per week over the relevant measurement period. The law defines an ALE as an organization that employs at least 50 full-time employees on average, including full-time equivalents, during the preceding calendar year.
In addition, most paid interns will likely qualify as nonexempt employees under federal wage-and-hour laws. That means they're typically entitled to overtime pay for hours worked beyond 40 in a workweek, unless a specific exemption applies. You'll also need to comply with any applicable state or local wage laws, which may provide greater protections than federal standards.
Once you've addressed compensation, the next step is creating an internship experience that benefits both your business and the student. Start by identifying current or future talent needs within your organization — particularly areas where students may already be developing relevant skills through coursework or training. This could include AI, digital marketing, cybersecurity, data analytics, engineering or other specialized fields. Gathering input from department leaders can help pinpoint where interns may contribute most effectively.
Next, connect with colleges, universities, trade schools and other educational institutions that align with your workforce needs. Career services offices can provide guidance on recruiting , internship expectations and academic partnerships. It's also helpful to research how similar businesses structure their internship programs.
When you're ready, define the role of each internship you'll offer. Consider which responsibilities will give interns meaningful experience while also supporting your business objectives. Some administrative tasks are inevitable, but these opportunities should primarily emphasize learning, development and practical exposure to the industry or field in which you operate.
Develop a detailed description of each internship that outlines its responsibilities, expectations, learning opportunities and the program's duration. Involving the department where the intern will work can encourage team buy-in and help employees view the program as a positive investment rather than a disruption.
Before posting an internship, evaluate its description from an intern's perspective. Does it clearly communicate growth opportunities, structured feedback and practical learning experiences? Career development professionals at your partner schools may also be willing to review descriptions and provide suggestions.
Strong supervision is essential to a successful internship program. Either before you post your internships or immediately after, determine who'll oversee each one's day-to-day work and whether you'll need to make workload adjustments to free up time for training and feedback.
Assigning a one-on-one mentor can also enhance the experience. Mentorships often benefit both sides: Interns gain professional guidance, while established employees gain emerging technical knowledge and fresh perspectives from younger talent.
Once you've chosen your interns and welcomed them to your workplace, remember that they're students. Mistakes and misunderstandings are part of the process. Train your supervisors and staff to exercise patience, provide constructive guidance and communicate as consistently as possible. Doing so can help interns grow into valuable contributors. At the same time, interns should understand that they're expected to follow workplace policies and professional standards, just like employees.
A well-planned internship program can help your business build a bridge for tomorrow's talent. Done right, internships support workforce development and may create lasting professional relationships with potential future employees.
Just be sure to prioritize meaningful training, fair compensation practices and thoughtful supervision when building and administering your program. Now that schools are back in session, it's the ideal time to begin exploring an internship strategy that's right for your business. Contact us for help identifying and managing all the costs involved.
Get in touch today and find out how we can help you meet your objectives.
