This article was updated on July 16, 2018.

Worried about employing interns? While an internship program can provide your business with fresh ideas and a consistent link to a qualified candidate pool, when not handled correctly, these programs can endanger your reputation, security and bottom line. In fact, sticking to best practices for employing interns is imperative for everyone throughout the organization who may interact with these eager students. Court cases have shown that in the eyes of the law, interns are usually viewed as employees and employers are subject to the same requirements as with employees.

Managers and HR leaders should be mindful of the training that interns will receive, to whom they will report, the type of work they will be performing, and that they should be compensated appropriately. For example, as a general matter, interns will usually need to be compensated in accordance with federal and state wage and hour requirements, and employers who fail to do so are subject to non-compliance risks.

Determining the Appropriateness of Unpaid Interns

If your organization uses unpaid interns, you may run the risk of non-compliance with state or federal wage and hour rules. While there are some cases in which unpaid internships may be permissible, there are strict criteria. For example, the DOL requires that unpaid interns in the for-profit sector receive training for their own educational benefit and must work closely with existing staff, among other criteria. Employers considering offering unpaid internships should review these requirements, and consult with counsel on any state or local wage requirements that may also apply.

Following Labor Rules

In most cases, interns should be paid — and in most states, they must be paid minimum wage. According to the DOL, the Fair Labor Standards Act (FLSA) allows employers to pay some employees under the age of 20 an "opportunity wage" of $4.25 per hour during the first consecutive 90 calendar days of employment. Check to see if your state or local jurisdiction has specific rules against paying anything less than minimum wage.

In addition to wages, the FLSA restricts the number of hours that 14 to 15-year-olds can work while in school to three hours per day, or 18 hours per week. The law also prohibits anyone under the age of 18 from working in certain hazardous occupations such as manufacturing, mining and others.

Keep in mind that all new hires, including interns, must complete required paperwork, such as Form I-9, Form W-4, Notice to Employees of Coverage Options and any other forms required by your state. If your intern is a minor, your state may also require them to get a work permit from the local school district or the DOL.

Protecting Your Organization

Many interns may be exposed to sensitive, protected business information. For that reason, it's crucial for HR leaders to establish compliant guidelines for recruiting, vetting and hiring interns. Those guidelines should cover the type of training the interns will receive and the level of access they should be given to systems and information, and may include a requirement for every intern to sign a confidentiality agreement. Plan ahead and discuss with managers the types of assignments and information that will be provided to interns to make sure they have a good experience, can add value to your organization, and aren't exposed to certain highly sensitive or confidential information unnecessarily.

Getting Your Organization On Board

To ensure that interns will be used appropriately across your organization, HR leaders should communicate openly and regularly with department heads. Start by creating written guidelines for hiring, compensating and managing interns, and make those guidelines easily accessible. Consider holding a training session in person or via your learning management system to communicate with managers about the risks that are associated with improper hiring or managing of interns. Many managers may not realize that interns are usually viewed as employees and must be provided with equal employment opportunities and other protections extended to regular employees.

Finally, remind department heads of your firm's best practices for employing interns at appropriate times of the year. For instance, in early spring, many departments will be looking for summer interns, so that may be a good time for a refresher. HR leaders should examine best practices for employing interns and internship protocols and make sure their organization is compliant — to protect interns from unfair working environments and to protect your business from security concerns.

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