by Deborah Sweeney | Featured Contributor
Good news internship fans – a recent ruling by the US Appeals Court in Manhattan re-affirmed the legality of unpaid internships last week, knocking back a 2013 decision that the interns for certain media companies were due compensation because the businesses benefited from their work. Personally, I’ve always recommended paying your interns, but I understand that isn’t always possible. And, with school out and summer officially underway, many college students are looking for real-world experience. Labor standards for unpaid internships are deceptively simple. The Department of Labor published a handy worksheet on the subject, but the rules are broad, and enforcement is notoriously patchy. Thankfully this recent ruling, and a few other cases, clarifies a few points.
You have to teach them
That is take-away number one for this case. Legal unpaid internships must be tied inextricably to the intern’s education, and the intern must learn more than they would have as a standard employee over the first few months of a new job. Now that doesn’t mean you can’t ask them to pick up coffee, but the vast majority of their work must be a practicum of their broader education. The court case mentioned above shows this is fast becoming one of the biggest litmus tests for the legality of an unpaid internship. A for-profit company thus can’t just saddle an unpaid intern with busywork like answering phones or making copies. You must teach your interns. Social media firms, for example, should cover ROI standards and measurement. Construction companies should cover order fulfillment and jobsite management. When planning an intern’s workload, look at the intricacies of running a business in your industry, and base it on that.
They can’t replace paid employees
Your intern cannot be a free secretary or personal assistant. In fact, they have to be closely supervised at all times. Sticking them behind the front desk or on the phones with some vague instructions to greet and route customers obviously does not meet this requirement. But even if their job is chock full of teachable moments and industry-related education, they still cannot displace a regular employee. A good way to test this is to first figure out under whom you’d like the intern to work. That way they have a direct supervisor, and you aren’t using them in lieu of hiring another employee.
Interns cannot benefit your company
At least from a pragmatic standpoint. Businesses hire interns for different reasons – sometimes it’s an attempt to inject new ideas into the company, other times it’s simply an act of philanthropy. But whatever the reason, a business cannot be the primary beneficiary of an unpaid internship. In fact, if you can prove work was actually impeded, you’re in a good position. This point is what landed the defendants in the cases ruled on last week in trouble. The plaintiffs argued that their employers benefited from their work, so they deserved a paycheck. You thus must make sure that no part of your business is dependent on an unpaid intern – if it is, they are benefiting your company.
As I mentioned before, I’m a big proponent of internships, and while I pay my company’s interns, I see the merit in unpaid opportunities. But, as the argument over whether interns deserve an income rages on, it is up to the providers of these internships to stay abreast as to what is expected. Above all else, ensure that any unpaid internships you offer are, first and foremost, educational. Sticking unpaid interns with your best employees – or even directly under yourself – is a good way to make sure your company meets supervision and teaching requirements. As long as your interns feel they are learning, and are appreciated, you’ll have a smooth summer.
Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA
As CEO of MyCorporation Business Services, Inc. (MyCorporation.com), Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.
Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites. She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.
In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.