What is an internship, and how does it help my business?
Is your business wanting to hire an intern, but you’re not sure you fully understand what an internship is? An internship can be described as a temporary job role that allows an entry-level individual with little experience in their field the opportunity to build practical skills and experience. Internships come in various forms. Some are paid, some are unpaid, and some may even provide educational credit for students working on completing a degree. Internships can be a beneficial program for both the intern and the employer. Interns can gain experience and insight into the career path of their interest, and employers can utilize the program to identify future employees and build their talent pool. Some companies even have specific programs that hire interns directly after they complete their internship.
Are internships paid?
Most likely, yes. All interns must earn a wage, whether minimum wage or above unless the internship meets the requirements set forth by the Department of Labor’s “six-factor test.” The six-factor test provides detailed parameters, and all factors must be met to justify having an unpaid internship program. If the internship doesn’t meet the requirements in the test, you should be hiring interns as regular but temporary employees. The company will usually pay them through their regular payroll and accounting processes, but the interns are working under the agreement and understand that their role is temporary.
Even if you hire part-time interns or full-time interns, it’s rare that they won’t be paid like regular employees. Employers are responsible for paying interns at least minimum wage, and interns are also subject to overtime calculations, along with other FLSA and state payroll requirements. Most states abide by this structure, so it’s very difficult to have an unpaid internship program these days.
In the rare circumstance that an intern isn’t being paid, and the program has met the requirements of the six factor test we previously mentioned, the intern will likely be receiving academic credits for a student, school, or college program in lieu of payment. There may also be a chance that they’re part of a group of training program interns that aren’t providing any work or services that benefit the company they intern for.
If you’re not sure that you’re correctly hiring your interns, your Bizhaven HR Business Partner can help make the determination and provide other intern hiring resource tips.
How long is an internship program, and do they require a specific amount of time?
While there is no definitive answer for how long an internship should last, an internship can be described as a temporary role with a determined end date. The timeframe and end date can be agreed upon by the employer and intern, but generally, the internship should not last longer than six months. The distinction is that the role is temporary and has a determined end date. We typically see internships lasting about 8-12 weeks on average. Some companies hire full-time interns, while others prefer to hire part-time interns. Some interns can be on site, and others can be remote or virtual. Either way, the timeframe of their internship program wouldn’t change, and there would still be a determined end date for the program upon hiring the intern.
Are unpaid work internships legal?
The answer is yes. In CA, hiring unpaid internships is legal, but there are some requirements if you are going to have an internship in the workplace. If you chose to have a paid intern for the summer, we will want to treat this intern as an employee. This means we will want to meet the minimum wage requirements and California’s different employment laws. If we choose to hire an unpaid intern, there are several requirements we must meet in order to be a legal unpaid intern. If you’re bringing on an intern this summer, email us at Bizhaven so we can ensure compliance with your intern process and save your business time and hassle.
Does an internship count as employment?
The short answer to this – is it depends. Internships may not always meet the requirements to be technically classified as employment. Whether or not the Internship is paid or unpaid, though, will help answer that question. Employers who offer paid internships are required to comply with federal and state minimum wage laws when determining intern compensation, and California employers are required to provide paid sick leave. Unpaid interns or volunteers are not employees because they do not earn a wage.
What most employers have come to an agreement on, however, is that internships are a great work experience for the intern, regardless of if they are unpaid or paid.
Internships provide excellent, temporary professional learning opportunities for students, recent graduates, and employees who are looking to make a career change and gain experience in a new field. Internships can give their participants hands-on experience with operations, project coordination, and other aspects of the business that they may not learn in a traditional classroom setting.
At the end of the day, experience is experience, and participation in an internship program should definitely be added to a resume. The skills learned, and the exposure gained help many people get their foot in the door and kick off their careers.
So you have an intern that you’d like to hire, but they’re under the age of 18. How should you proceed? Whether hiring a minor for regular employment, or for an internship, the same rules and regulations would apply.
Prior to permitting a minor to work, employers must possess a valid Permit to Employ and Work from the state.
According to the Department of Industrial Relations, after an employer agrees to hire a minor, the minor obtains from their school a Department of Education form entitled “Statement of Intent to Employ Minor and Request for Work Permit”. The form must be completed by the minor and the employer and signed by the minor’s parent or guardian and the employer. Work permits issued during the school year will expire during the first week of the following school year and will need to be reissued if so.
The bottom line is that all employees under the age of 18 in the state of California must have a valid work permit on file during their employment.
Hiring unpaid interns for your business
As mentioned before, it’s generally a difficult task to meet the criteria required to have an unpaid internship program. However, if you believe you have what it takes to have an unpaid internship program, there are steps you can take to ensure you’re covering the requirements.
The U.S. Department of Labor (DOL) updated its requirements for unpaid internships in 2018 and now includes a seven-item “test” to verify if an internship can be unpaid. The test is often referred to as the “primary beneficiary test” and is used to determine whether the individual should be classified as an intern or an employee under the requirements of FLSA.
Generally, if the business is going to benefit from the internship more than the intern does, you will want to make sure you’re paying your interns for their contributions.
For more info on the seven test questions, check out the DOL website here: DOL Internships Fact Sheet
Hiring paid interns in California
In the state of CA, it may be even trickier for your business to conduct an unpaid internship. California has its own stringent rules and regulations regarding hourly pay and minimum wage. If you’re seeking to create an internship program in California and you don’t know where to start, reach out to Bizhaven!