The Ins and Outs of Hiring Interns

The Ins and Outs of Hiring Interns

Why interns and internships must provide educational opportunities—not just free labor for your company.


The news has been full of stories lately about lawsuits filed by unpaid interns whose main jobs were to get coffee and be messengers for those on a movie set. They felt they received nothing of educational value except, of course, a well-known company name to put on their resumes. But before you cancel plans to hire an unpaid intern for the upcoming summer, you should know it is possible to design a program that will comply with current laws and benefit both your company and the intern.

Ross Perlin, author of the 2011 book “Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy,” believes unpaid internships have grown in popularity for a variety of reasons: an educational movement that favors practical forms of learning; enormous growth in temporary and other forms of contingent employment; and less enforcement due to tight budgets at the U.S. Department of Labor. Colleges and universities also play a significant role by granting academic credit for unpaid internships, which makes it much easier for employers to argue they are providing an educational rather than employment opportunity.

The first thing to keep in mind when creating an internship program is that it is supposed benefit the student—not be a way for you to pick up a free worker. The Department of Labor has six criteria that must be met:

  1. The internship is similar to training that would be provided in an educational institution.
  2. The internship experience is for the benefit of the intern and for a specific time period.
  3. The intern does not displace a regular employee, but works under close supervision of existing staff.
  4. The employer derives no immediate advantage from the activities of the intern.
  5. The intern is not entitled to a job at the conclusion of the internship.
  6. Both parties understand the intern is not entitled to wages.

It is much easier to stay out of trouble if a college or university has oversight over the internship program and provides educational credit. For instance, the Rochester Institute of Technology in Rochester, New York, has an extensive co-op and internship program. Michelle Magee, associate director for employer relations, says the school and the employers it works with avoid many problems by requiring employers to provide a detailed job description that is vetted by the school staff before a student is placed.

“Students are required to take a full-term course and attend an orientation before they start any internship,” Magee says. “Once the student begins work, we do frequent check-ins with both the employer and the intern. If the company is located nearby, we make personal visits, as well. At the end of the term, both the student and the manager write a work report and an evaluation. If there were any issues, at least we know about them before another student is placed there.”

Ross Tashjian, director of operations for medical mattress maker DiaMedical USA and its division, both based in West Bloomfield, Michigan, had a very positive experience with a student intern recently. “He worked on our database and did other computer work along with organizing files,” Tashjian says. “He arrived with a lot of good skills, and I think he gained a lot of real-world experience, as well. We had no issues with what work was appropriate and what was not.”

Christopher Bareham, a student at the University of Tampa in Tampa, Florida, has held several unpaid internships and reports he learned a lot from each one. “The people were great and it really helped me define what career I want to pursue in the future,” Bareham says. “Sometimes an internship helps you figure out the type of work you don’t want to do before you go ahead and take a lot of courses in that subject area.”     

In the court case of the interns filing a lawsuit against Fox Searchlight Pictures, a U.S. Court of Appeals recently set aside a lower court decision that ruled in favor of the students. The appeals court judge wrote that employers have considerable leeway to use unpaid interns legally when the work serves an educational purpose. He argued that the proper way to determine if a worker’s status should be as a paid employee versus an unpaid intern was to apply a “primary beneficiary test,” a concept proposed by Fox in which the worker can be considered an employee only if the employer benefits more from the relationship than the intern.

It would be a shame to see the end of internship programs simply because companies are afraid of getting sued. If you are unsure if your program meets the requirements, contact your company’s legal counsel or an attorney who specializes in labor law. You also can check with the Department of Labor. It offers a helpful tip sheet at or visit its Wage and Hour Division website at If you knew the facts and can define clearly how the student will benefit, both sides will end up in the winners’ circle.

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