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Run an Intern Program—and Not Get Sued

Date: March 1, 2014      Publication: Bottom Line Personal      Source:  Jay A. Zweig, Bryan Cave      Print:

Publisher Condé Nast recently lost a lawsuit brought by a pair of its former interns. The interns successfully argued that the extremely low wages they were paid—less than $1 an hour—violated US labor laws. Other Condé Nast interns were not paid at all.

Condé Nast has since ended its internship program, and other companies are no doubt considering doing the same to avoid similar lawsuits. But business owners and executives need not scrap their companies’ internship programs. Internships—even unpaid ones—can be perfectly legal as long as certain Department of Labor guidelines are followed.

Here’s how to run an internship program without running afoul of Department of Labor rules…

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Provide unpaid interns with training and supervision. An unpaid internship must have an educational aspect. The training provided must be primarily for the intern’s benefit, not primarily for the immediate advantage of the business. Close supervision or mentoring of interns is required, too. “He/she will learn by seeing what’s going on in the office” is not enough.

Team with a local college or tech school. If you work together with a -local school to establish your internship program, your interns might be able to earn college credit for working for you. That would reinforce the idea that the internship is providing the students with educational benefits, as required. The court cases successfully brought against internship programs thus far have not involved internship programs run in partnership with colleges.

Put it in writing. Write up a description of the internship that explains both the work that the intern will do and the training that the intern will receive. This document should make it clear that the intern will receive greater value than the company.

Example: A newspaper might get a few articles from an unpaid intern but not enough to make up for the time the newspaper has invested in training and overseeing that intern.

This written description should note that the internship is unpaid and that no job is promised at the internship’s end. Both the employer and the intern should sign it.

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Or just pay interns minimum wage to avoid these Department of Labor complications. The above rules apply to unpaid internships. If you pay your interns at least minimum wage—that’s just $7.25 per hour in many states—you could treat them like any other employee without fear of legal complications. (Abide by federal and state overtime rules as well.) Paying interns also could result in a better pool of intern candidates.

Source: Jay A. Zweig, managing partner of the Phoenix office of Bryan Cave, a law firm that has more than 25 offices worldwide. He has more than 25 years of experience representing employers in human resources and wage-and-hour-law–related matters. He also is an adjunct faculty member at Arizona State University Sandra Day O’Connor College of Law, Tempe, and past president of the Maricopa County Bar Association. BryanCave.com