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Unlocked: The OpenSesame Blog

Katie Layendecker

Unpaid Internships: Tips for building a great (and legal!) program

Josh Blank

In general, I think companies should be very careful about offering unpaid internships. At OpenSesame, we believe interns create value and should be compensated in addition to the educational experience they receive.

06-24-2013 17:58:51 pm

As college students prepare to enter the volatile and highly competitive job market, internships are increasingly becoming a necessary step on the road to full-time employment. Unfortunately many employers may be rethinking internship programs as a result of the number of high profile class action lawsuits being filed by former interns of companies like Gawker and Condé Nast.  

Internship programs, paid or unpaid, should be designed with intention and as a professional development experience for the intern - not an afterthought when an employee or department is overloaded. Unpaid internships can be just as valuable as a paid experience, as long as a company carefully considers the goals of the program and how it will be managed. The Fair Labor Standards Act has laid out the following five criteria to guide companies when considering an unpaid internship program:

  1. Educational: What an intern learns during the unpaid internship, while being work experience, must be similar to what she or he would learn in an educational environment. 
  2. Beneficial: The internship must be beneficial for the intern. 
  3. Not Replacements: The intern is supervised by, and does not replace, regular employees. Non-Abusive: The employer cannot receive an immediate advantage from the work of the intern.
  4. Non-Binding: The intern cannot be guaranteed a job at the end of the internship.
  5. Full Disclosure: Both the employer and intern must fully understand that the internship is unpaid.

Obviously, what constitutes a legal unpaid internship can be incredibly complicated and nuanced. Here are a few suggestions to help ensure that your unpaid internship program is legal:

Design
Make sure that your unpaid internship program is designed to help the intern, not your company. Any direct benefit of the program should be given to the intern. Also, include a form to be signed by both the intern and direct supervisor outlining the job responsibilities and that the internship will be unpaid. Walk through the form with the intern on his or her first day to make sure they understand and are comfortable with the expectations.

Hands-On Experience
Hands-on experience is one of the most helpful thing you can provide your interns. Not only will your interns gain real-world knowledge, they also will learn new skills in the process. It is important to remember that an intern’s work cannot replace that of an employee. For example, if you need a report done, pair an employee with an intern. The employee can then assess the intern’s work and give them feedback in real time. The intern gets a valuable learning experience and learns how to communicate in the workplace, while not replacing the work of an employee.

Training 
Providing your interns with training can be a great and easy way to educate your interns. The training courses should be focused on topics that interns have not covered in school like phone and email etiquette, customer service basics, how to use LinkedIn, or interview skills. Online training is a great way to accomplish this because the courses are designed similar to what a student would receive in a college setting (quizzes, real-world scenarios) while still providing valuable professional development.

Mentors
Having a mentor can be indispensable to an intern’s learning experience. They can guide interns through the internship program, provide valuable career advice and help build the intern's network. The mentor should meet with the intern regularly (weekly or bi-weekly) in a casual setting. 

Check-Ins 
Regular check-ins with a supervisor can help ensure interns are not being assigned in ways that would break federal law. It also gives the intern an opportunity to speak up and share feedback on the program. Schedule weekly one-on-one meetings with each intern and come prepared with specific questions about the intern's work and interactions.

Keeping a close eye on your internship program is the best way to guarantee everything remains within the law. However you choose to structure your internship program, always check the federal guidelines and remember, unpaid or paid, internships should provide valuable real-world experience. You are helping prepare the next generation of workers, potentially some that will work alongside you in the future. What would you hope they know?

Image Credit: NASA Goddard Space Flight Center

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