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Summer interns can’t just be free labor

The idea of hiring unpaid interns this summer has become very appealing to small business owners contending with a difficult economy.
/ Source: The Associated Press

The idea of hiring unpaid interns this summer has become very appealing to small business owners contending with a difficult economy.

An extra worker, even an inexperienced one, can be a big help to a company that can't afford to hire a regular staffer. But business owners need to be sure they don't take on interns only to save money. Federal labor laws are fairly direct in saying that internships should be for the benefit of the interns, not their employers.

Paula Slotkin knew back in January she couldn't afford to pay an intern as she has in the past.

"We're having the same issues our clients are," said Slotkin, a partner in Topaz Partners, a Woburn, Mass.-based public relations firm. "I can't take on someone for $350 a week in the summer."

But Slotkin started getting resumes from would-be interns who were happy to work for nothing, just so they could get the experience of being at a PR agency. She hired a young woman who will be earning college credit for her work this summer.

Summer interns are common at public relations firms. Interns who are in school want hands-on experience before they graduate, while recent grads are looking to build their resumes.

Company owners often look at internships as tryouts for a permanent job in the future.

"I would never hire someone who wasn't first an intern," said Kellee Johnson, a principal with The Ballast Group, a PR firm in Chicago. Her company is doing well this year, and will have three paid interns who have finished school. A fourth intern who's still in school won't be paid.

Johnson also likes having interns because "I've been mentored very well in my career and I believe it's time to give back."

O'Connell & Goldberg, a PR firm in Fort Lauderdale, Fla., hasn't been able to hire full-time staffers the past few months, so having two unpaid interns this summer will help fill the gap. If the interns do well, "when the economy turns around, obviously they'll be my first picks" for permanent jobs, co-owner Barbara Goldberg said.

Nancy Shenker has just hired her first unpaid interns for her Thornwood, N.Y.-based marketing firm, theONswitch. The economy was a factor in her deciding to have unpaid interns, but she also is impressed by students' commitment to the job even if it doesn't have a paycheck.

"They are passionate about the business and are comfortable with making sacrifices to get the experience they need," she said.

Owners who take on unpaid interns should be familiar with the federal Fair Labor Standards Act, which details the criteria that an internship must meet in order for the intern to not be paid. The law regards an internship as a training program.

Under the FLSA, an intern must receive training similar to that offered in a vocational school. The training must be for the benefit of the intern. The intern must not displace, or do the work of, a regular employee.

The law also states that an employer must receive no immediate advantage from what an intern does. That might jeopardize the unpaid status of many internships — if an intern, say, stuffs envelopes for mailing, helps to manufacture products or performs other services that benefit an employer.

The FSLA also says an unpaid intern is not necessarily entitled to a job at the end of the internship. And, finally, both the intern and the employer understand the intern is not entitled to wages.

The Department of Labor's Web site has more information about the criteria that must be met for an intern to be unpaid. It can be accessed here.

Interns who get college credit but not pay are covered by the School-to-Work Opportunities Act of 1994, which generally requires that an intern be in a planned program of job training that's coordinated with school-based learning. He or she should perform tasks and activities that build upon one another, increase in complexity and help the intern to learn and master basic skills. The intern must be exposed to all aspects of the industry.

As with the FLSA, an intern under the School-to-Work act cannot displace a regular employee.

Julie Talenfeld, president of Boardroom Communications Inc., based in Plantation, Fla., worked with the University of Florida in hiring two unpaid interns who will earn college credit for the summer. The interns will be doing public relations work such as writing press releases, but the work is intended to help them learn, Talenfeld said.

"They get to have a lot of great experience," she said. "They realize that experience is valuable, and even more valuable than money right now."

The Labor Department also has a page describing the criteria for unpaid internships under the School-to-Work programs. You can find it here.