Primary Beneficiary Interns

“I have a college student who would like to intern with my company. She needs to acquire service learning hours but the school doesn’t have an internship program set up for this. Is it possible to still have her as an unpaid intern?”

Your HR Survival Tip

We have always stated unpaid interns must be associated with an internship program through their school so the student gets credit in exchange for participating in the program. Otherwise, the “intern” needed to be an hourly employee. However, earlier this year the US Department of Labor (DOL) decided to abandon the old test used to determine if someone qualified as an unpaid intern.

The new test isn’t that different except it doesn’t require an accredited school internship program and, instead, focuses on who the primary beneficiary of the internship may be. Bottom line, an unpaid intern should truly benefit from time spent as an intern with you… more than your company does. Here are the points in the new test:

• The internship training should be similar to training received in an education environment.
• The experience is focused on benefitting the intern.
• No regular employees are displaced because you have an intern and the intern is closely supervised by your existing staff.
• The training the intern receives from you doesn’t immediately help your company and may, on occasion, even impede your normal business operations.
• The intern is not entitled or even expecting to receive a job offer at the end of the internship.
• Both the company and the intern fully understand the internship is unpaid time.

As mentioned above, most of this was really part of the old test. However, now the strongest focus will be on ensuring the intern truly benefits from spending time as your intern. Many companies felt they could have interns doing all the grunt work and the intern benefitted just from seeing the activity around them. But that wasn’t and isn’t true. Make sure your internship program provides real training for the intern. You’re giving back by helping students learn more about the jobs that caused them to go for that major and developing more skills to help with their studies.

While the federal rule (DOL) has changed, keep in mind that California’s description in the IWC Orders still require the training to be supervised by a school or disinterested agency. Don’t assume CA will drop that but, so far, it appears CA may be fine following this new test. Talk with an employment law attorney to be sure your plan will work.

Make sure your interns are part of an accredited college internship program or you are providing similar training to advance that intern’s skills and knowledge. This new test is most helpful for those companies that want to help students but haven’t found (or developed) an internship program with the schools. If you can’t commit to the training, hire the intern at minimum wage and you can have them doing whatever you need on the job.