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How to be sure your internships are legal


Many college students need real work experience for school credit or to get a job after graduation, so they may agree to work as interns for free. But I would warn you that unpaid internships can be most dangerous.

As a recent case against Fox Searchlight Pictures recently illustrated, internships may only be unpaid in very limited circumstances. In the lawsuit, a federal district court ruled that interns who worked on the movie “Black Swan” should have been paid because the internships did not have an educational component and the studio reaped benefits from the interns’ work, which goes against two of the Department of Labor’s six criteria for legally unpaid internships.

Criteria for legal unpaid internships:

  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.

Attorney Lisa Yankowitz discussed this issue in a recent “Workplace TV” video. In the video, she cited a 2013 survey conducted by the National Association of Colleges and Employers that found that nearly half of all interns are unpaid. Chances are a good number of those internships don’t meet the stringent criteria above. Are you part of those statistics?

That doesn’t mean you should abandon the idea of using interns altogether. After all, internships are a great way of identifying and grooming future star employees. But extreme caution should be used when deciding whether an intern should be paid or not. You would probably be better off erring on the side of paying interns since the criteria above are so hard to meet.

To make this a little easier to swallow, some recruiting firms will pick up your interns on their payroll—and offer interns to you on a contract basis. (My firm, Kemper Associates, does this—and it is easy.) With this method, clients eliminate the risk that comes with unpaid interns while still reducing their costs (payroll taxes, benefits, etc.) and administrative burden. If you have any questions, I will be glad to help you.

Philip Kemper is Founder/President of Kemper Associates, a 36-year-old Chicago-based national executive search firm, specializing in Permanent and Contract staffing for Trade Shows and Exhibits, Staging and Equipment Rental, Business Meetings and Events Production, Video, Training and Incentives and more. His more complete bio is on LinkedIn at: http://www.linkedin.com/pub/philip-kemper/2/795/308/ . You may view Kemper Associates’ website at: www.Kemperassociates.net, and contact Phil with questions or comments, and employment needs at: Kemperassoc@hotmail.com , or his private phone line: (312) 944-6551.

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